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Digital ad spend reaches record six-month high in Britain

Digital ad spend reaches record six-month high in Britain

Through gloomy economic conditions shines a rare glimmer of British sun: spending on Internet and mobile advertising in the UK rose to a record six-month high in the first half of this year to reach nearly £2.6 billion.

This represents a 12.6 percent increase from the first half of 2011, during which £2.3 billion was spent on Internet and mobile advertising.

These figures come from the latest Internet Advertising Bureau UK (IAB) Expenditure Report, published today, which is based on a survey conducted by Pricewaterhouse Coopers measuring like-for-like, year-on-year growth.*

Other key findings include:

  • Mobile ad spend more than doubled
  • Paid search advertising dominates digital ad spend across platforms
  • Online video advertising increased by nearly half

Mobile advertising

Spending on mobile advertising has continued what the report refers to as its “meteoric rise,” soaring 132 percent to £181.5 million. As we reported in March, mobile ad spend grew 157 percent from 2010 to 2011, according to IAB.

The ongoing upward trend is attributable, at least in part, to the proliferation of smartphones: they now grace the pockets and handbags of nearly 60 percent of the UK adult population.

On mobile platforms, display, video, SMS and MMS ad spend rose 91 percent to almost £50 million.

“There’s still plenty of room for growth,” commented Tim Elkington, Director of Research and Strategy Research at IAB, citing the fact that of the UK’s 100 biggest advertisers, only 40 percent have mobile-optimised websites (although consumers are apt to spend nearly 70 percent longer on such sites). “If all advertisers get wise to this, we’re likely to see significant mobile growth for some time yet,” he said.

Elkington’s positive outlook is underscored by the fact that mobile still makes up only 7 percent of digital ad spend.

Paid search advertising

Paid search advertising, dominated by Google, rules across platforms with a 59 percent share of digital advertising.

According to IAB, the "transparent and measurable nature" of paid-for search marketing renders it "appealing during these budget-pressured times." As such, it increased by nearly 16 percent to approximately £1.53 billion.

Nearly three quarters (72 percent) of mobile ad spend comes from mobile search, which rose 152 percent to £131.6 million in the first half of 2012.

Online video advertising

Within the display advertising category, which represents 23 percent of digital ad spend, the share of online video ads increased from 9 to 11 percent, and spending on video advertising rose 43 percent to £69.8 million.

As SFN Blog reported in July, the UK is recognized as a world leader in digital ad spend as a percent of total media; while we are not throwing our umbrellas in the air just yet, these continued signs of digital ad growth bode well for the future.

Sources: IAB, The Guardian, PaidContent, The Drum

Photo of Edinburgh courtesy of Elizabeth Squibb, graphic courtesy of IAB.

*Note on Methodology: The IAB/Pricewaterhouse Coopers figures were collected from over 100 media or advertising companies. They show “like-for-like” growth, meaning that only companies that submitted in the first half of 2011 and the first half of 2012 are included in year-on-year calculations.



Emma Knight


2012-10-09 16:08

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