• The New York Times , Monday, December 4, 2006 11 AM

In Britain, Web advertising continues to grow apace, roughly 40% annually, accounting for as much as 14% of overall ad spending in Britain--the highest level in the world, says the New York Times and about twice the level as here in the United States.

Terry Semel, the chief executive of Yahoo, says that Britain is a good year or two ahead of the U.S. in online advertising. According to the Interactive Advertising Bureau in Britain, Web ads have grown from 1.4% of ad spending in 2002 to 10.5% this year. By comparison, the IAB in the U.S. says American Web spending has gone from a 2.5% share to a 5.6% in the same period.

Some say the difference comes down to American media's reliance on television. TV spending is expected to top $72 billion in the U.S. this year; in Britain, there are fewer TV channels and the audience is much smaller, so far less is spent on TV. That may be why the top 50 national advertisers in the U.S. spent just 3.8% of their budgets on the Web in the first half of this year.

Others point out that in the U.S., many Web publishers sell through ad networks, which means advertisers don't have much have say over where their ads appear--and advertisers like control, especially big advertisers. That may be a cultural thing, but in Britain, national advertisers have more opportunities to work directly with publishers, which may be why they're willing to allocate as much as 30% to 40% of their budgets to online.

Read the whole story at The New York Times »