Leader: A watershed moment for online, ten years in the making

1 October 2009 | By Justin Pearse

It’s fitting that in the week of the tenth birthday of the nmaTop 100 Interactive Agencies guide, celebrating a decade of rewarding the most creative and business-changing agencies, online ad spend finally passes TV. As our cover story reports, the first half of this year saw online ad spend rise 4.6% to £1.75bn to take a 23.5% share of ad spend, making it the UK’s largest ad medium.

Of course, this is nothing to do with any battle between the two mediums, especially as ever more research proves the powerful impact on consumer behaviour they can deliver when working together. But the speed at which online has overtaken its decades-old cousin is a validation of the industry’s belief in the effectiveness of online advertising and its ability to deliver solid return on investment.

Brands’ increasing realisation of the power of online, especially when combined with traditional media such as TV, and the allocation of an increasing share of budgets to digital – such as Mercedes-Benz’s UK share of 50% – has kept interactive agencies rising in a bumpy year. This year 45% of the Top 100 agencies reported incomes over £5m, with 17 reporting incomes in excess of £10m.

Of course, all this celebration can’t hide the fact there’s still a way to go. Online advertising may be on the rise, but even though the top-ranking media agencies in the guide are reporting £1bn in total billings, it’s not enough to support publishing, with 70% of publishers betting on paid content, as our report on the AOP census on page 4 discovers.

And while FMCG brands like Kellogg’s are increasingly focusing online, the process remains slow. For such brands measurement remains an issue. This is even true, as Nigel Walley points out, of online video, which is doing so much to bolster online display spend and attract traditional big-spending TV advertisers online.

But the industry has overcome bigger challenges in the past decade and nothing should detract from this week’s achievement.