Digital advertising spend soared 12.6% to a record six-month high of £2.59bn in the first half of 2012 – up by over £294m from £2.3bn in the first half of 2011, according to the latest Internet Advertising Bureau UK (IAB) report.
Mobile ads saw the highest increase; up 132% to £181.5m in the first half of 2012. This rise was fuelled by smartphone ownership hitting 58% of the UK population, with mobile now accounting for 7% of all digital ad spend.
Within this sector, display, video, SMS and MMS advertising on mobiles increased by 91% to £49.9m while mobile search grew like-for-like by 152% to £131.6m – accounting for 72% of mobile ad spend.
These figures appear at odds with the latest Marketing-GAP report, however, which claims many digital direct marketing techniques do not appeal to the vast majority of consumers.
According to the IAB report, carried out by PwC, paid-for search marketing remains the largest sector. Year-on-year, search increased 15.9% to £1.53bn from £1.32bn – representing a 59% share of digital advertising.
Boosted by the continued rise in video and banners in social media, display grew by 10.6% year-on-year to £590.9m from £534.7m, representing a 23% share of digital ad spend in the first half of 2012.
Digital video advertising increased 43% to £69.8m from £49.0m, accounting for 12% of online and mobile display in the first six months of 2012; the equivalent share was 9% in the same period in 2011. Banners in social media environments increased 36% to £134.2m, accounting for 23% of display ad spend, up from 19%.
Classifieds grew 7.2% to £427.1m, while recruitment classifieds showed encouraging growth, at £149.8m compared to £135.4m in the same period of 2011 – their highest level since the first half of 2008.
Among media owners who submitted revenue figures to the IAB and PwC, ad spend on tablets is estimated to be at least £2.4m in the first half of 2012.
IAB director of research and strategy Tim Elkington commented: “Almost 60% of people in the UK now have a smartphone, average UK household broadband speed is 9MB and social media accounts for one fifth of all Internet time. As digital technology and services evolve to make consumers’ lives easier, more connected and more fun, it’s no surprise that advertisers are coming to the digital party with bigger budgets, despite the challenging economic times elsewhere.
“However, there’s still plenty of room for growth. Take mobile; 60% of the UK’s 100 biggest advertisers still don’t have a mobile-optimised website yet consumers spend almost 70% longer on sites which are. If all advertisers get wise to this, we’re likely to see significant mobile growth for some time yet.”
The consumer goods (FMCG) sector joins the finance sector as the biggest spender on digital display advertising – both accounting for almost 16% of display ad spend in the first half of 2012. FMCG’s share has almost doubled in the last three years – from 9% in the first half of 2009 – as marketers realise digital’s power in delivering brand awareness, particularly as part of ad campaigns involving other media such as TV and print.
The five top display sectors between January and June 2012 are completed by entertainment & media (13%), retail (11%) and travel & transport (10%).
PwC senior manager Anna Bartz said: “For the first time since we started measuring digital adspend, consumer goods advertisers have joined the long-time leader, financial services at the top of the spending charts. Interestingly, spend by FMCG advertisers increased across all digital channels, reflecting advertisers’ recognition of online and mobile as brand building platforms.”
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