In conjunction with PwC, the IAB has produced the twice yearly online advertising spend figures in the UK since 1997. As used by the Advertising Association, these figures are the most authoritative means of assessing the size of the online advertising market in the UK. This study is one of the key pieces of work the IAB carries out.

The great news is that advertising on the internet increased by 14.4% to a new high of £4,784 million in 2011, up £687 million year on year. Indeed, despite the backdrop of a depressed UK economy, in 2011 the online sector experienced its biggest increase in five years.

Summary breakdown:

Total online | £4,784m | +14.4%

Search | £2,767m | +17.5%

Display | £1,128m | +13.4%

Classified | £785m | +5.2%

In more detail, drilling down into the figures, strong growth in the display sector as a whole meant that it passed the £1bn barrier. This increase was fuelled in part by bigger, richer and more dynamic ads that spiked display spend by 13.4% to a high of £1,128 million (£945 million in 2010) and a 24% share of online ad spend (23% in 2010).

Meanwhile video advertising continued its incredible growth and now accounts for 10% of all online display advertising. Expenditure on online video doubled year on year to £109 million (£54 million in 2010).

The figures are just as encouraging in social. In 2011 banners and embedded formats on social media platforms such as Facebook, YouTube and LinkedIn, increased by 75% to £240 million – an eight-fold increase since records began in 2008.

Looking at individual sectors, UK ecommerce shoppers helped Retail make the largest gains in the second half of 2011 as it became the third biggest display advertiser. Consumer Goods (FMCG) moved to second place, while Finance just held on to top spot.

Elsewhere, online is still the preferred direct response tool as search soared by 17.5%; Consumer and B2B Classifieds reached half billion for the first time; and of course mobile continues its remarkable upwards trajectory with advertising on mobile devices rising by 157% in 2011, to a new high of £203 million.

Want more information?

The full press release with all the relevant facts and figures is available here. All IAB members can http://www.iabuk.net/research/library/2011-online-adspend-full-year-results (you’ll need your login details for the site to hand). You can also watch a video here featuring key figures from the IAB, Google, Microsoft and MindShare discussing the figures and offering their insights into what they mean for the industry.

All round then, this has been a very strong year. But of course this growth has not been achieved without hard work by everyone involved in this sector. I’d like to take this opportunity to thank everyone who took part in the survey and extend our gratitude to every one of our members.

The £5bn barrier is not far off. Let’s all work together to make it happen in 2012!