The popularity of watching videos online and the growth of advertising on social media sites such as Facebook pushed up UK online advertising last year by 14.4 per cent to ?4.8bn.
Retail and consumer-facing industries have increasingly adopted online advertising, which now comprise more than one-quarter of UK internet display ads, according to figures prepared for the Internet Advertising Bureau by PwC.
Combined, the two sectors comprise 27 per cent of all online display advertising, outpacing financial services display ads on 15 per cent.
Tim Elkington, director of research and strategy at IAB, said the increase in 2011 was ?quite strong? given the uncertain economic environment.
?Online display advertising is becoming more attractive to consumer-facing businesses, and it is the retail and consumer advertisers who are increasing their ad spend budgets the most,? Mr Elkington said.
He attributed the increase in retail display ads to new marketing formats, such as internet videos. Online advertising campaigns are also being used to drive high street footfall for retail and consumer businesses, he said.
Re-targeting technology ? where items that a computer user has previously searched for are recorded and reappear on different website banners ? has also helped advertisers more accurately target individual consumers.
Advertising on social media such as Twitter and Facebook rose by almost 75 per cent on a like-for-like basis compared with 2010 levels, slowing from the 200 per cent growth recorded that year.
?Facebook has become a significant part of the internet marketing landscape. Facebook and Google are now the clear leaders in display advertising,? said Ian Maude, an analyst at Enders.
?More and more companies are setting up Facebook pages and they are increasingly spending advertising money to drive traffic through to those pages or trying to recruit fans.?
Spending on banner display ads on social media sites rose 21 per cent year on year to ?240m in 2011, while online video display ads rose 10 per cent to ?109m.
Advertising from search engines such as Google, Yahoo and Microsoft?s Bing remains the most popular form of online marketing, growing by 17.5 per cent to ?2.77bn.
Advertisers now spend more than ?1 in every four on the internet, according to the IAB.
The figures will be followed next week by a report from the World Advertising Research Council, which is expected to show that UK online ad spending overtook the amount spent on press ads in 2011.
In 2010 spending across all media rose by 6.9 per cent compared with 2009 to ?15.5bn, according to Warc, the biggest increase since 2000.
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