UK media groups set for targeted online ad boom

By Kate Holton - Analysis

LONDON (Reuters) - Britain's beleaguered publishers and broadcasters are finally well set to secure their share of the booming online advertising market by combining sophisticated video ads with behavioral targeting.

But as more content moves to the Internet, from television programs to user-generated content, those same groups will need to remain innovative if their Web sites are to stay popular with users and command high prices for ad space.

Media groups in Britain, which has the most developed online ad market, have long looked to the Internet to offset the relentless fall in their traditional revenues. But they have struggled to compete with the giant portals of Yahoo and AOL.

Analysts and ad executives say the sites that currently command the highest CPMs -- the all important cost per 1,000 views of an advert and a common industry metric -- are premium channels such as finance on big portals like Yahoo.

But publishers and broadcasters have the content that attracts viewers and could better exploit the full potential of online video ads, resulting in a very sophisticated offering.

"The likes of Yahoo, AOL and Microsoft get millions of users and (advertisers) get fast reach," CEO Guy Phillipson of the Internet Advertising Bureau told Reuters.

"But if you look at traditional publishers like ITV, Channel 4 and The Sun, they already have probably 95 to 100 percent awareness for their offering and have great potential."

Online advertising is the fastest-growing segment of the ad industry as it promises to build brand awareness and monitor users' response rates, while marketers can target specific audiences through niche sites.