Crisis? What crisis? UK the powerhouse as digital soars

Marketers might be planning to spend more on traditional channels this year, but the pan-European digital advertising market is still powering ahead, achieving double-digit growth and surpassing £100.2bn in annual revenue for the first time, with the UK in the driving seat.

So says IAB Europe’s 2024 AdEx Benchmark Report, now in its 19th year, which includes data from 30 national markets – Portugal makes its debut this year – while it also features a comprehensive overview of retail media as a category.

Despite macroeconomic uncertainty in 2022, the European digital advertising market rebounded strongly in Q4 of 2023, continuing this trajectory into 2024.

The latest data reveals double-digit growth of 16%, with total investment reaching £100.2bn (€118.9bn), reinforcing the continued investment by advertisers in the channels and formats shaping the digital advertising ecosystem.

This is also the strongest growth recorded since 2011, with the exception of 2021’s digital bonanza in the wake of the Covid-19 pandemic.

Among the key growth drivers social emerged as one of the strongest-performing channels.

Meanwhile, retail media experienced impressive double-digit growth at 22.2%, while video led the display category with a 24.5% increase, largely driven by growth in connected TV formats, including SVOD and BVOD.

Video also accounted for over half of display advertising in nine markets, highlighting its dominant role in the digital landscape.

But while digital audio remains an area of interest, growth in 2024 was more modest, largely due to continued issues with scale and measurement.

In addition, almost two-thirds of all advertising spend in Europe is now digital, with 21 out of 30 markets seeing double-digit growth in 2024.

The UK remains one of the top growth markets, with IAB UK recently reporting it had reached almost €42bn (£35.3bn), as investment in video display – spanning social channels, publishers, outstream, AVOD and BVOD – rocketed 20% to £8.3bn. However, Ukraine and Serbia also saw standout growth, reflecting ongoing digital acceleration and increased advertiser confidence in smaller regions.

IAB Europe chief economist Daniel Knapp said: “Last year, we forecast a 10% growth rate for 2024, which felt ambitious at the time. But the market exceeded expectations – a testament to digital advertising’s integral role in European advertising strategies.

“The end of 2023 marked a clear upward trend, which continued into and through 2024. While 2024 shaped up to be another healthy year, early forecasts for 2025 suggest a renewed period of volatility and that the ‘rollercoaster’ may be restarting.

“Driven by macroeconomic uncertainty and geopolitical tensions, including the impact of new EU tariffs, advertisers are likely to adopt a cautious, ‘wait-and-see’ approach, prioritising measurable outcomes and performance over broad experimentation.”