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UK Online Ad Revenues Rose in 2001

More research suggests that despite a decline in the U.S. ad market in the last year, the climate in Great Britain was decidedly more upbeat.

According to findings from the U.K. Interactive Advertising Bureau and PricewaterhouseCoopers, revenue grew 7.1 percent during 2001, to £165.7 million (about $240.22 million).

"With year-on-year growth of seven percent ... the Internet can claim to have held its own in a very tough climate," said Paul Pilkington, a senior manager at PricewaterhouseCoopers who oversaw the research.

That's especially impressive considering the fact that traditional British media experienced its own serious contraction, with television dropping percent £287 million ($418.9 million) or about 11 percent during the same period.

According to the U.K. IAB, the country's largest online advertising trade association, the increased adoption of rich media ads served as the primary driver for the sector's growth. It's believed that rich media formats, which typically command a higher price from advertisers, are more effective than static ad units, and are more attractive to deep-pocketed, branding-conscious traditional marketers.

"The industry should be encouraged that it experienced growth despite tough economic conditions," said UK IAB Chairman and Chief Executive Danny Meadows-Klue. "Today the marketing campaigns of traditional brands are driving the medium's growth -- replacing the marketing dominance of young Internet companies. This lays secure foundations for the sector, key to establishing a long-term pattern of sustainable growth."

However, not all the news was rosy for the online ad industry, which posted much of its gains during the first half of the year. During the latter six months -- typically the ad industry's strongest quarters -- spending actually fell dramatically, down 17 percent to £75.5 million ($110.2 million).

In part, analysts attributed the decline to burgeoning global economic woes and the Sept. 11 terrorist attacks in the U.S.

The U.S. IAB and PWC have yet to release statistics for the full year, but they're not likely to be nearly as pretty, since revenue for the first three quarters declined 8.4 percent from 2000, to $5.55 billion.

At any rate, the report is the latest testament by industry-watchers to the relatively greater staying power of the U.K. online ad market, though -- as in the U.S. -- exact figures differ. In March, Forrester Research said the Web ad sector had seen revenues grow 28 percent during 2001, up to £122 million (or $178.07 million).