Posted December 4, 2006 4:55 pm by with 2 comments

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The New York Times has a lengthy article on the growth of online advertising in Great Britain, and how it’s outpacing the U.S. In fact, online advertising in Britain is growing by 40% and is expected to account for 14% of all advertising spend – more than twice the percentage in the United States.

While it may seem strange that Britain is able to go from lagging the U.S., to kicking its butt, it makes a lot of sense.

…British media are nearly all aimed nationwide in contrast to the United States newspaper and television markets, where local and regional markets are big players. These local markets in the United States have, so far, been slow to move ad money online.

When you country fits into Texas – probably more than once – everything is national. While the U.S. is fragmented by regions – local TV stations, radio, newspapers – the U.K. relies more heavily on national audiences.

Once curious downside, that I’ve not seen mentioned before, is that as the percentage of online advertising grows, the overall amount spent on advertising reduces.

Growth in spending on advertising and marketing services is set to slow to 0.3 percent this year, according to Group M, after growth of 4.3 percent last year and 6.7 percent in 2004.

It makes total sense – the cost to advertise online is cheaper – but it’s the first time I’ve seen the theory actually play out in practice.

Here’s a graph showing the growth of Britain’s online advertising, compared to America’s.

  • Andy, I would think that because GB is such a smaller area, less amount of people, and thus a smaller ad market, that people would embrace technology at a faster rate. It doesn’t surprise me one bit that there growth is higher than here in the states. Am I wrong in this thinking?

  • You’re right. The adoption of cell phones in the UK was a lot faster than the US. There are probably plenty of other examples.