Fresh evidence has emerged that the concerns over the effectiveness of digital advertising, as well as the current ad placement scandal, are having little impact on the medium, with the market growing by 17.3% – its fastest rate for nine years – reach £10.3bn in 2016.
That is according to the IAB UK/PwC Digital Adspend report, which shows mobile spend being the biggest driver of this growth.
Spend rose 50.8% to £3.87bn, with mobile now accounting for 38% of all digital spend, up from 4% just five years ago. However, it accounts for 63% of video spend, 76% of content and native (including social media news feeds) and 79% of social media spend.
Spend on mobile video ads more than doubled (up 103%) to £693m, making it the fastest growing ad format. It accounts for 29% of the total growth in digital ad spend.
The report authors say the rise in mobile video ad budgets reflects online YouGov data showing that in the last six months, 54% of British smartphone users watched video clips on their phone, with two-in-five of these saying they do more of this than a year ago.
A significant number have also watched TV programmes (17%) and films (11%) on their smartphones. Perhaps unsurprisingly, this behaviour is much more prevalent among 18-24 year olds, with 75% watching short clips, 44% watching TV and 33% watching films on mobiles. Six-in-10 people who watched short clips, TV or Film on their phone did so while ‘out and about.’
IAB UK chief marketing officer James Chandler said: “Reaching the £10bn threshold has been made possible by brands breaking the mould, trying innovative formats and making the most of video to reach and amaze people. It’s impossible to ignore the issues the industry is facing at the moment, but digital never stands still and these figures are testament to the long term strength and power of digital.”
The report also reveals the march of the robots; 72% of the £3.77bn spent on display ads was traded programmatically (£2.71bn), with significant growth coming from direct deals and private marketplaces.
“The biggest change in how display ads are sold is the rise of programmatic direct, which now accounts for nearly half of sales,” said PwC senior manager Dan Bunyan. “Right now, considerations such as brand safety mean the advertiser is rightly demanding more certainty in the placement of their ads and the industry is evolving quickly to find new solutions to address brands’ needs in this dynamic environment.”
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