Online advertising revenue in the UK is poised to overtake national press advertising revenues within the two years according to new research that reveals a 65.5% year-on-year growth in online ad spend last year.

Advertisers spent £1.4bn promoting their products and services online in 2005, the Internet Advertising Bureau’s annual report shows.

“These figures surpassed all our initial expectations. Our next milestone [for internet ad spend] is £2bn - a real possibility within the next 12 months, which would make online bigger than national press,” said Guy Phillipson, the chief executive of the IAB.

The internet’s share of all UK advertising spend was 7.8% - double radio’s market share - and closing fast on national paper revenues, which were worth £1.9bn last year.

Worryingly for the press industry, online classified advertising grew 62.4% year-on-year in 2005, to £262.2m.

The online classified growth was driven by advertising from the automotive and recruitment sectors, while the IAB reported that press revenues for classified advertising fell 5.1% last year.

Recruitment advertising was worth 22.1% of the total UK market. Significantly, spend on entertainment and media saw the most significant growth, from 6.2% to 10.2%, as broadband uptake has meant consumers are increasingly being engaged by video streaming and more complex “rich media” advertisements.

Unsurprisingly, paid-for-search - on the likes of Google and Overture - saw the biggest increase of all advertising formats, up a massive 78.8% from £429m in 2004 to £768m last year

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