Home : Newsletters : 2007 : March
The whole online advertising market
The IAB / PwC have been tracking the value of online advertising by analysing figures submitted by media owners since 1997. They started working with five media owners and have grown the survey to include submissions from 102 media owners in 2006.
The study shows that the value of all online advertising (not just recruitment) in 2006 was £2.02 billion (up 41% year on year on a like for like basis, ie not including the new media owners that were added to the survey from 2005 to 2006). This gives the internet an overall market share of 11.4% in terms of all advertising placed in 2006. This compares to a TV market share of 22%, press display 21%, press classified 16% and direct mail 13%; with directories, outdoor, radio and cinema accounting for 16% between them.
Online advertising is the only media that showed significant year on year growth and overtook the value of national press advertising for the first time. Most other media were down year on year - the biggest decrease was press classified that fell 7.8% year on year.
What makes up the £2.02 billion?
The IAB figures also break down the online spend into broad categories. The largest category is paid for search that accounts for 58% of all online advertising, followed by display on 23% and then classifieds with 19%.
Online recruitment advertising
The figures for all classified advertising are then broken into three areas - recruitment, consumer classifieds and Business2Business classifieds and have the following values for 2006
- Online recruitment classifieds = £215 million
- Other consumer classifieds = £133 million
- B2B classifieds = £29 million
This shows that online recruitment classified advertising has grown 18% year on year since the figure of £182 million in 2005. This represents a slow down in growth as the two previous year on year growth figures hadbeen 50% (from £121 million in 2004 and £82 million in 2003).
So why the slowdown in growth?
Our personal experience of the online recruitment market in the last 12 months doesn't seem to tally with the slow down in growth that the IAB figures show; more clients seem to be doing more online advertising and the increasing interest in online recruitment training, conferences, blogs etc all seems to suggest that the rate of growth should be increasing, so what could be the explanation? Here's a couple of questions worth thinking about:
- is the growth of online recruitment masking a slowdown in recruitment advertising?
- how much of the decrease of 7.8% in press classified is going online and how much is going nowhere?
- is the market reaching saturation / maturity with limited room for more growth (seems unlikely)?
- are recruitment advertisers spending less money on recruitment classified and more money on paid for search advertising (possible, but probably not that significant)?
- could the aggressive price competition amongst job boards be limiting the financial growth of the market?
Like many things, the answer is probably a combination of the above plus some other factors not mentioned. However, online recruitment is still growing (not quite as quickly as the last couple of years, but still growing) and press classified advertising is falling. As for the future, the IAB speculated that online advertising spend could top £2.5 billion in 2007 and overtake TV by 2010.