The UK’s digital advertising market is continuing to outperform most other channels despite the volatility of the UK’s economy, reaching £13.8bn of spend in the first six months of 2023 – a year-on-year increase of 5%.
That is according to IAB UK and PwC’s half-year Digital Adspend update, with spend on video ads witnessing the strongest growth – up 11% – as advertisers increasingly harnessed the brand building potential of the format.
The growth in spend is in line with the popularity of short-form video content, with Ofcom’s Media Nations report showing that over a third of UK adults watch short-form online videos daily, rising to 68% of 15- to 24-year-olds. Overall, spend on display formats – including both video and non-video – grew by 8% year-on-year.
Meanwhile, search ads continued to attract the lion’s share of investment, accounting for 50% of the total market. The category grew 5%, attracting nearly £7bn in H1.
Classified ads were the only format to see spend decline, dropping 13%, although this is markedly less sharp than the 21% fall seen in H1 2022. When it comes to split by device, spend on mobile ads grew by 9% with non-mobile formats remaining flat.
IAB UK chief executive Jon Mew said: “The results reflect two things – that the digital ad market isn’t immune to wider economic pressures, but also that it’s repeatedly resilient in the face of challenging circumstances.
“Over the years, we have become used to seeing extremely strong growth and there is no getting away from the fact that spend has slowed so far this year.
“And yet the industry is still growing despite the UK’s soaring inflation, the threat of recession, and the impact of structural changes – such as Apple’s removal of identifier for advertisers (IDFA).
“It’s particularly encouraging that video formats are seeing strong investment. Advertisers are increasingly harnessing the creative power of digital channels to bring campaigns to life and deliver long-term results, and we see this reflected in robust video investment.
“As we head into the final months of 2023 and the lead up to Christmas, advertisers should be doubling down on a digital-first approach to make an impact, drive results and resonate with consumers where they’re choosing to spend their time.”
Trade Desk UK vice-president Phil Duffield added: “Marketers should be optimistic about these findings – the increased investment in digital media channels is a testament to advertiser’s resolve.
“In particular, ongoing spend in video, which allows the application of data to inform decision making, reveals the value that marketers place on having a sense of certainty in their advertising efforts in this environment.
“Brands now need to maintain these investments and commit to long-term brand building strategies. By sticking to their convictions on the channels that can best support wider business objectives, marketers can be confident heading into 2024.”
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