Online Advertising Breaks $4bn Mark Thanks to Facebook Effect

As the crunch continues more of us are buying, selling and searching online classifieds from our smartphones and laptops more than ever. Online advertising is also getting bigger and bigger thanks to the popularity of social networks.

Facebook continues to go from strength-to-strength with half of the UK poking each other, Twitter has celebrated its 5th birthday and Myspace well, that’s no longer a social network site is it?

All of this online social behavior has helped UK online display advertisting grow to be worth almost £1bn last year with the total internet ad market breaking the £4bn barrier for the first time.

The Internet Advertising Bureau’s annual report, compiled with PricewaterhouseCoopers and published today, attributed a 27.5% year-on-year surge in online display advertising to the ‘Facebook effect’ as advertisers utilise the blue bannered social network to hawk their wares – even Warner Brothers are flogging their films on the Zuckerberg social site!

In total the UK ad market grew by 12.8% year-on-year in 2010 to pass the £4bn mark, with £1 in every £4 spent on marketing and advertising by British companies now spent online.

This is not great news for print advertising – the online classified market grew 9.7% year-on-year in 2010 to £751m with mobile advertising growing 116% to £83m.

It’s not only large companies and professional marketing agencies jumping online. Pew research centre found that the number of online adults using free online classifieds as opposed to the local free-ads has more than doubled in the last 4 years with almost half (49%) of internet users searching online classified sites compared with 22% that did so in 2005.

As of May 2010 that figure rose to 53% – that means more people are searching classifieds than checking what’s happening in their favourite sports (52%), what”s going on in the world of politics (50%) or checking financial info such as stocks, mortgage rates, etc (37%).

Most free classifieds are popular with those people in the 25-44 age bracket: 62% of online 25-34 y/o and 57% of 35-44 y/o visit free online classifieds. That just so happens to be the very same groups that have pounced on the social networking sites.

That’s not to say that the over 50s aren’t joining in as well – between 2009 and 2010 the amount of this age group online rose from 22% to 42%. There’s 35% of 55-64 year old web surfers using online classifieds.

Are you an Ebay, Gumtree or Craigslist aficionado or do you buy and sell using another site?

Let me know.