• by Wendy Davis  @wendyndavis, March 30, 2006

Online ad spending in the United Kingdom climbed to £1.36 billion, or about $2.4 billion, last year--marking a 65.5 percent increase from 2004. according to a new report by the Interactive Advertising Bureau U.K. and PricewaterhouseCoopers. What's more the proportion of online ad dollars last year soared to around 8 percent--almost double the 5 percent spent online in 2004.

News of the surge in Internet ad spending comes several weeks after a TNS study commissioned by Google revealed that Web users in Britain now spend more time online than watching TV. That study found that the average Web user spends 164 minutes each day online, compared to just 148 minutes watching TV. The study also found that 66 percent of Web users in Britain increased their online time in the last year.

The IAB study showed that the Internet was siphoning ad dollars--as well as consumers' attention--from traditional media. Spending for online classified increased by £101 million, or $175 million, to around £263, or $456 million--marking a 62 percent jump from 2004. At the same time, traditional press classifieds fell 5 percent.

Search spending in the U.K. soared by £339 million to reach £768 million, or around $1.33 billion--marking a 79 percent increase from 2004. Display also increased to about £337 million, or $584 million--44 percent more than 2004.