Digital spend highest in seven years, argues IAB

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Digital ad spend grew at the fastest rate for seven years with UK digital ad spend up 16.4% to more than £8.6 billion, according to the latest Internet Advertising Bureau UK Digital Adspend report, conducted by PwC.

The rise is the highest since a 17.1% rise in 2008 and follows a 12% increase in the number of internet-enabled devices in each household. The report claims this now stands to 8.3 per household with connected TVs seeing the biggest rise in ownership at 27%. Smartphones ranked at 21% whilst laptops at 18% outgrew tablets at 16%. The most popular internet device was shown to be smartphones at 2.1 per household.

Mobile made up more than three-quarters of digital ad spend growth, up by 60.3% year on year to £2.63 billion, or 30.5% of digital advertising.

Video ad spend also saw strong growth, up by 50.7% to £711 million. On mobile video spend rose by 98% to £353 million. Content and native advertising spend, including advertorials and ads in social media news feeds, rose by 49.9% to £776 million, while spend on social media sites meanwhile grew by 45% to £1.25 billion – or 41% of banner/video display ad spend.

“The increasing array of devices people use to go online has helped digital ad spend hit another gear as advertisers look to reach them and time spent online increases,” says Tim Elkington, chief strategy officer at the UK’s Internet Advertising Bureau. “Smartphones are the major driving force behind this, as people increasingly use them for activities they used to do on desktop, from searching and shopping to social and watching video.”

The report showed that display ad spend for the year grew by 24.5% to a 35% or £3.03 billion share of digital ad spend. The programmatic share rose from 47% in 2014 to 60% in 2015. Direct sales meanwhile feel 47% to 37% of display ads.

“We’re seeing a three-pronged change in media owner strategy when it comes to selling display ads,” says Dan Bunyan, senior manager at PwC. “There’s a shift in sales from networks to Real-Time-Bidding exchanges, a shift from direct to programmatic direct, and one from open to private market places. It’s almost gone full circle in terms of the desire for a more controlled environment to sell in. We predict programmatic will account for 80-90% of display ad sales by 2019.”

The study showed that consumer goods companies were the biggest banner and video display ad spenders in 2015 – responsible for 18% of spend. It was followed by travel and transport at 13.4% and retailers at 13.3%. 

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