IAB/PwC Digital Adspend reaction: Channels to watch

New figures from this week’s 2023 IAB/PwC Digital Adspend report show the digital advertising industry continues on its growth trajectory, hitting £29.6bn last year, driven by take up of new channels but still dominated by search.

Yet while the report draws its own conclusions, Decision Marketing quizzes industry chiefs for their take on what it all means for the advertisers and agencies alike.

First up is Good-Loop chief executive Amy Williams, who says: “Growth in digital media is a win in a difficult macro-financial climate. Media channels that have traditionally often been described as emerging are now more firmly established on media plans, which shows that the landscape is evolving and there is an appetite for exploring fresh ways to engage with new and existing audiences. This doesn’t mean just new channels but new ad formats, too.”

However, Williams insists the sector needs to go further in changing advertiser habits. She explains: “As brands are looking for new ways to stand out, both the ‘how’ and ‘why’ are becoming increasingly important. Advertisers are ramping up their spend on digital, but as the volume increases, the challenge is to ensure that what we put out is engaging, interesting and relevant, and delivered in a way that is ethical and sustainable.

“This is where more purpose-led formats and messages can play a big role, providing brands with a means to build value-based connections with consumers and cut through the noise. It will be particularly relevant after the deprecation of cookies – as personalisation gets harder to deliver, advertisers need to find new, innovative ways to create these closer connections with consumers, which will shape their investment in digital going forward.”

For Silverpush senior vice-president of Europe Paul Briggs, it is no surprise to see that ad investment in social video is up to 20%.

However, he adds: “With the likes of YouTube, TikTok and Instagram offering an abundance of video content, brands need to be relevant and offer personalised content that evokes audience engagement.

“With advances in contextual technology in part driven by the AI revolution, brands now have the ability to target contextually relevant content and serve ads to consumers based on what they are currently engaging with.

“On popular platforms like YouTube, a fan watching a replay of Raheem Sterling wearing his New Balance boots and scoring a stunner for England at this year’s Euros will then see an ad for New Balance shoes. This creates a deeper connection with the ad and increases the likelihood of engagement.”

“While it’s great to see the continued confidence in digital channels for ads, brands and advertisers need to ensure that they’re putting these resources to good use in ways that guarantee conversion.”

Meanwhile, Samsung Ads head of UK sales Andy Jones reckons of all the disciplines the growth in connected TV ad spend comes as little surprise given the evolution of the sector over the past few years into an established channel for viewers.

Jones continues: “In the run-up to cookie-deprecation, advertisers are increasingly recognising the value and cost efficiencies of CTV’s data-rich insights. Being able to understand who is engaging with your advertising, for how long, at what times of the day and the specific TV service, provides brands with crucial in-depth insights to inform more incisive campaigns each year.

“We are now entering the era of ad-supported streaming and brands have to prepare to take advantage of this rapid shift. Netflix and Amazon only recently announced their ad-tiered offers but have seen strong uptake, and FAST (free ad-supported streaming) platforms are also seeing strong growth and have solidly established themselves in household’s TV mix.

“With more cost-conscious consumers enjoying the benefits of ad-supported streaming, brands face vast and evolving opportunities to appear, with impact and relevance, in front of a growing audience of highly captivated viewers.”

The demise of third-party cookies is also front of mind for Yahoo head of investment Tom Curry, who reckons advertisers seem to have found a “nice home” in digital TV advertising.

He explains: “The wide array of premium content, as well as the increase in ad-tiered subscriptions, has been extremely valuable for advertisers looking to tap into both dedicated and diverse audiences. CTV has become one of the standout performers for advertisers over the past few years, so it’s no wonder that more are looking to witness the benefits for themselves.

However, Curry warns: “It’s a highly saturated and fragmented market, especially the CTV landscape, and those advertisers looking to get their ads noticed will be those that prioritise data – and tech-driven strategies – specifically AI.

“AI is quickly maturing and becoming much more sophisticated, and we’re now starting to see the real benefits of the technology in terms of measurement. Not only is it able to maximise investments made in areas of CTV and digital out of home through optimised ad placement, but it can also create highly personalised ads which, combined, help advertisers stand out from the rest of the crowd.”

Curry also believes the growth of the digital-out-of-home (DOOH) advertising market is one to watch, reflecting how consumers are once again craving large-scale events and outdoor experiences.

He concludes: “This will only increase this summer as a whole host of sporting events – such as the Olympics and Paralympics, Euros 2024, and Wimbledon – will see advertisers actively looking to engage with fans as the excitement builds.”