According to a new report, online advertising expenditure has increased so much in recent years, it has now surpassed TV for the first time ever.

The report, compiled by the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC), states that spending on internet-based advertising has increased by 4.6 percent during the first half of 2009 to reach GBP£1.752 billion. In comparison, TV advertising is GBP£1.6 billion, a decrease of about GBP£300 million compared to last year.

What is even more impressive is that online advertising has increased its revenue year-on-year, despite the entire advertising sector contracting by 16.6 percent over the past 6 months. Unsurprisingly, technology firms were the biggest spenders on online adverts, making up about 19 percent of the market, the report said. This was followed by telecoms firms, the finance sector and entertainment and media.

Online spending in the UK is also much more than the US. UK online spending accounts for 23.5 percent of total advertising compared to 13.9 percent in America. However, with companies such as Google making about 97 percent of their revenues from advertising revenues, it is no surprise to see online spending increase year-on-year, often by margins of up to 17 percent.

"Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions," said IAB chief executive Guy Phillipson.

"Online display has performed notably well against its peers in TV, print and radio despite more than GBP£1.5 billion being wiped off the advertising industry. We have a roller-coaster of a year ahead but even in tough economic conditions marketers still recognise the value, accountability and measurability of online advertising."

PwC online advertising expert Eva Berg-Winters added, "Perhaps surprisingly, a slowing economy has accelerated the migration to digital technology and hence the continuing shift from more traditional forms of advertising to online, which promises return on investment and measurability in a period of instability. The only certainty is that this transgression demands fundamental structural change of business models across all industries."

By Tom Stone