Online spend proves Teflon-coated against Covid cuts

mobile 2The UK digital advertising market has proved resilient to the Covid pandemic, while all around were in the doldrums, witnessing 5% growth last year to reach a total spend of £16.5bn.

That is according to the IAB UK’s Digital Adspend report for 2020, conducted with PwC, which shows that the UK’s digital ad market rallied in 2020, following the initial impact of the pandemic on spend.

For the first time, digital audio and podcasting data are included in the report, a move that reflects the growth of audio within the digital landscape. Overall, the digital audio market grew by 17% year-on-year to a total of £103.7m, including podcast spend which rose by 43%; streaming spend increased by 8%.

When it comes to the fastest growing ad format it is social display that comes out on top, up 19%. This reflects wider shifts in consumer behaviour during the pandemic, with UKOM data – the UK standard for audience measurement across PC, tablet and smartphone – showing that time spent with social media grew by 12% in 2020.

Elsewhere within the display market, video display also outgrew the market at 19%. Investment in non-social display – including standard display banners – fell by 2%.

Meanwhile, search continues to attract the largest share of spend across formats, up 7% year-on-year to account for 51% of all digital ad spend – growth that coincides with the explosion of the ecommerce market.

The affiliate market grew by 10% year-on-year in 2020, to a total of £627m and the 2020 report also captures smartphone affiliate spend for the first time – showing a 23% YoY increase. It accounts for 41% of all affiliate spend, while non-smartphone affiliate spend grew by 3%.

Spend on smartphone ads grew by 10%, while non-smartphone mobile spend held steady, down just 1%
Finally, classified spend fell by 30% to a total of £976m, with the market displaying the effects of the pandemic as well as longer-term structural decline.

IAB UK chief executive Jon Mew said: “When the pandemic hit, all of our predictions for 2020 went out the window. We knew it was going to be a tough year for the entire media industry, digital advertising included, and the impact continues to be felt.

“It’s brilliant news that the digital ad market has rallied and is back in growth – buoyed by spending in areas such as video, social and podcasts – but it’s important to recognise that this growth won’t be felt by all areas of the digital ad industry and that recovery is still underway. Today’s results are very encouraging and show that we’re moving in the right direction.”

In response to the report, Kantar’s media division chief executive for UK and Ireland Mark Inskip commented: “So much of our lives moved online last year and that’s reflected here as advertisers sought new ways to reach audiences at home.

“What will be interesting in 2021, and vital for marketers to understand, is which digital habits consumers will stick to as life opens up again. The growth of podcasts is a prime example.

“Branching out from being just a commuting companion for many, podcasts found new listeners in 2021 as people looked for ways to stay entertained and informed. Businesses like Facebook clearly see huge headroom in audio formats, and there could be exciting opportunities for marketers to tap into.”

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