It was reported this week by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers that overall online ad spend had risen by a colossal 17% to £3.35 billion in 2008.

They have also stated that the Internet’s share of the total ad spend in the UK has risen from 15.5% in 2007 to 19.2% in 2008, which means that nearly £1 in every £5 spent on advertising in the UK is going online.

The report highlights the increasing dominance of online advertising with spending increasing by £540 million year on year, as advertisers began to recognise the importance of online advertising and the return on investment that can be achieved if it is managed properly.

However, further investigation has shown that all the recorded growth happened in the early half of 2008 and that in the later half of the year there was actually a 1% decrease in spend. This is likely to be closely linked to the economic downturn, as it is the first time this has happened since 2001, when the famous dot com crash occurred.

The IAB report also stated that there has been a dramatic decline in the proportion of total spend for the consumer goods category, which has fallen from 5.7% in second half of 2004 to just 3.8% in 2008.

Other areas of Internet advertising have also shown growth, with online display advertising recording an increase of 7.7% in 2008, but also fell in the second half of the year, by a worrying 9%.

Similarly, digital classified advertising has also grown year on year, with a reported 22% rise in 2008, despite a decrease of 2.2% in the latter six months of the year.

It is paid search that is reported to be the major source in 2008, with figures for spending up by 22.7%, which is an increase to a staggering £1.9 billion spent during the year.

However it has taken a slight hit due to the economic downturn, just like the others areas, as this growth dropped to just a 2.5% increase in the last six months of 2008.

Paid search still dominates UK Internet ad spend, however, by controlling the market with a enormous share of almost 60%.

However despite the downfall of most Internet advertising mediums in the last six months of 2008, it has still managed to overtake the print display sector, with an increased share of the market, which now stands at 19.8% against the print displays share of 19.7%.

This makes Internet advertising the second largest advertising medium in the UK, behind the leader, TV advertising, which currently has a share of 21.9%, which is predicted to fall due to the fact the recession has been hitting TV advertising hard in the last six months.

This report clearly shows the popularity and importance of online advertising, and we may even see it’s share of UK advertising overtake television advertising in the near future, this makes online advertising a great opportunity that should definitely be considered.