Google’s headline advertising revenues surpassed ITV1’s in the third quarter as the search engine demonstrated it could generate more money from sponsored links than 30-second commercials in Coronation Street.

An analysis for The Times shows that Google generated £327 million in advertising between July and September, compared with an estimated £317 million for all of ITV1 across the UK during the same three-month period.

That is the first quarter in which Google has overtaken Britain’s top commercial channel and came despite ITV1 reaping an advertising boost from the Rugby World Cup.

Google racked up £925 million in advertising revenue in the UK in the first nine months and is set to come in at about £1.25 billion for the year as it continues to expand. A year ago it generated £871 million, overtaking Channel 4, meaning that its UK annual growth is about 43.5 per cent.

BACKGROUND

• Stake that puts $15bn tag on Facebook

• Viacom mounts renewed attack on Google

• Google beats Wall Street with 46% profits surge

• A new private jet for Google's founders

• Vodafone chief says Google phone will get lost

Google. Who's looking at you?

It wants to know everything about you. It wants to be your best friend — or your Big Brother. Are your secrets safe with Google?

Related Internet Links

• Google company information

• Google share price charts

Related Links

• Internet outshines ITV in ads war

• Advertisers leap into Facebook

• Nikesh Arora

ITV1 revenues, meanwhile, are expected to fall about 7 per cent this year, reflecting the channel’s underperformance of a mature television market. However, ITV1 is still likely to generate slightly more than Google for the year as a whole at about £1.3 billion but only because of its lead in the first half and the strength of its fourth-quarter sales.

ITV as a whole can still claim to be Britain’s biggest recipient of advertising because revenues will be about £1.45 billion this year with digital channels factored in. The search engine does not receive all the money it generates, passing on about 29 per cent to partners, meaning that on a net basis it will take nearly £1 billion for itself.

Nevertheless, the shift in the balance of power has led ITV to call for a reduction in the regulation it faces. Last month, Michael Grade, the executive chairman, said: “Google, whose advertising revenues have overtaken Channel 4’s and which has 75 per cent of the search advertising market, is wholly unregulated. Yet ITV labours under a host of anachronistic proscriptions about what it can and can’t do.”

A spokesman said: “Google operates in a highly competitive market. Online advertising faces stiff competition from television, radio, outdoor, newspaper and magazine advertising as well as direct marketing. Online ad spend accounts for only 11 per cent of overall advertising spend in the UK.”

There are also arguments that both businesses are complementary. Lorna Tilbian, an analyst at Numis Securities, said: “It’s frightening that Google is getting as big as ITV1 in what seems like a nanosecond. But the two companies are in different businesses — one in classified and the other in display. Google has largely increased in size in a way that has helped expand the pie.”

Advertising in the UK grew by 3.1 per cent to £9.1 billion in the first six months of this year, according to the Internet Advertising Bureau, using figures calcuated by PricewaterhouseCoopers. Without a 41 per cent increase in the value of online advertising, to £1.3 billion, total advertising would have fallen by 19 per cent.

ITV executives fall back on the mantra that television is a “brand builder”, while Google is a “brand finder” and that the commercial broadcaster has hosted a series of campaigns from online brands, such as Ask.com, the search engine, and eBay, the online auctioneer.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive