Advertising Top Stories
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UK Digital Advertising Spend Up 14.3%, Driven by Smartphone and Video

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PwC and IAB released their findings into UK digital adspend this morning and disclosed that the total figure – £11.5 bn ($16bn) in 2017 – represents a 14.3% increase over the previous year.

The research also found that nearly all growth in 2017 originated from smartphone advertising, with the medium witnessing a stunning 37.4% increase year-on-year (alongside a total smartphone adspend of £5.2 bn). In the UK, 45% of all digital adspend and 61% of all UK digital display is now on smartphone.

Video advertising was another clear winner with £1.6bn spent on the format, representing 39% out of a display total of £4.1bn and driving the majority of growth in display. Within video, outstream has overtaken pre-post roll as the largest video format (56% of all online video).

Social revenue has seen steep gains and is now worth £2.39bn, representing 21% of all digital ad spend, up 38% year-on-year. Advertisers and agencies have also been drawn to the automation and data driven tactics offered by programmatic, with 80% of display advertising now being traded programmatically. This is expected to grow further by 2020 as targeting improves and the entry of more governance around transparency.

Commenting on the results, Stuart Flint, Head of EMEA at Oath, says, “IAB UK’s adspend results announcement reinforces that advertisers are now following consumer behaviour in the shift to mobile in video consumption. Mobile all-up is still showing huge growth.

“How brands experiment with AR and mixed reality on mobile is one of the areas to watch and we’re likely to see the technology increase from a nominal 10% of marketing budgets as adoption grows.

“We’re also seeing more of a shift towards ‘moments’ led marketing, understanding motivations behind certain interactions (using human and machine-led insight), This allows brands to build their campaigns around which motivations are most likely to see the best response to different messages, in different contexts, at different times.”

Commenting on the video findings, Justin Taylor, UK MD Teads says, “The latest stats from the IAB show that outstream has reached a watershed moment. It has overtaken pre-roll as the largest video format with a phenomenal 94% increase year on year.

“Users have also got behind outstream – their engagement with the format shows it delivers a fantastic, non-intrusive experience, enhanced by creative and immersive elements such as 360 degree video and chatbots.

“At Teads we have long held the view that in order to fund quality publishers and maintain a free and open web, more innovative digital advertising solutions and formats are needed. This is why we have been championing outstream ever since we created it seven years ago, to help publishers fund the quality journalism we all value.”

Paul Lowrey, Digital Strategy Director, Time Inc. UK adds, “The headline 14.3% increase is a timely boost for the digital industry which has faced many challenges over the last year and the findings demonstrate that the market is adapting to audience demand for a better user experience.

“However, within the key findings it is also interesting to see the surge in programmatic direct investment – accounting for 65% of all programmatic buys. This is a clear sign that advertisers are placing a greater emphasis on transparent, brand safe environments and with GDPR looming and a perception of trust still an issue for many clients, the value of premium context will continue to rise in importance.”

Further reading:

IAB UK: Smartphone video is fastest growing online ad format