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BizReport : Advertising archives : April 10, 2015

Advertisers increase spending to keep up with tech adoption

As more Brits own more digital technology, advertisers have upped their spend online and on mobile to reach them, as new figures released by the IAB UK illustrate.

by Helen Leggatt

The study, conducted by PricewaterhouseCooper and set alongside YouGov consumer data, found that advertisers in the UK spent £7.2 billion on digital advertising in 2014, up 14% from 2013's £6.26 billion, driven by the increasing adoption of digital technology.

Today, Brits have 1.7 smartphones per household, 1.3 laptops and 1.2 tablets. Forty percent of households now own one tablet, 19% have two and 11% have three or more. Tablet-dedicated ad spend alone grew 118% to reach £87.4 million in 2014.

adspend fy2014 graph.png

"Advertisers are increasing their digital budgets to reach people as they go online through an increasing array of devices," says Tim Elkington, Chief Strategy Officer at the UK's Internet Advertising Bureau. "It's a win-win for consumers, because digital advertising pays for the wide range of free online services they increasingly rely on in their daily lives, but don't necessarily want to pay much for."

Boosted by video and social media, display advertising across the internet and mobile grew almost twice the overall digital rate (14%) at 26.4% to £2.27 billion in 2014. Display now accounts for 32% of digital ad spend - its largest ever share.

"Display advertising's record share shows marketers are increasingly seeing online as a viable 'brand awareness' ad medium - as with traditional media - not just one for generating an immediate 'direct response'," said Elkington. "The internet has been characterised as the latter since the start due to its unrivalled measurability but this shows online advertising has come of age."

Other key findings from the study include:

- If online services were not free, Brits would be prepared to pay a maximum of £1.53 a month for their email service, £1.33 to use search engines, £1.10 for video content, 92 pence for news websites, 88 pence for social media, 55 pence for online games and 52 pence for price comparison site;

- The areas of life that Brits say would be most affected without the internet or mobile phone are Banking/finance (51%), keeping up with current events (42%), shopping (38%) and relationships with friends and family (37%);

- Social media ad spend grew 65% to £922 million, with 56% (£517 million) accounted for by mobile;

- Content and native advertising spend hit £509 million - 22% of digital display advertising;

- Video advertising grew 43% year-on-year to £442 million in 2014 - compared to just £53 million five years ago;

- Mobile video advertising grew 142% year-on-year to £164 million;

- Paid-for search marketing increased 8.7% to £3.77 billion in 2014;

- Classifieds including recruitment, property and automotive listings, grew 11.6% to £1.05 billion - accounting for 15% of digital ad spend.

Image via Shutterstock

Tags: advertising, Internet, mobile, study, U.K.

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