UK digital ad spend hits record 6 month high of £3bn

Mobile ad spend up 127% YoY – share of digital pie has doubled to 14%
Britons spend 1 in 12 waking minutes online
Mobile video advertising up 1,260%
Consumer goods overtakes entertainment/media as biggest mobile display advertiser – almost doubles its share in a year

Press release

October 7th 2013. British consumers average 43 hours a month online – one in every 12 waking minutes¹ – and advertisers spent a record six-month figure of £3.04 billion to attract their attention, according to the latest Internet Advertising Bureau UK (IAB) Digital Adspend report, conducted by PwC, with UKOM-approved comScore consumer data.

UKOM/comScore reveals that 22 per cent of all UK internet time across computers, tablets and mobile phones is now spent enjoying entertainment online.

Social networks and blogging now account for 12 per cent of internet time or one in every seven minutes. Together, these activities account for over one third of Britons’ time online.

IAB/PwC data shows that advertising on the internet and mobile phones increased, like-for-like*, by 17.5 per cent to £3.04 billion in the first half of 2013 – up £435 million from £2.61 billion in the first half of 2012.

Over 46.1 million people are active online, according to UKOM/comScore, equating the £3.04 billion advertisers spend to about £66 per head of the online population over the six month period.

Mobile’s share of ad spend doubles in a year

Fuelled by smartphone ownership reaching over two-thirds (68 per cent) of the UK population in June 2013², mobile advertising grew like-for-like by 127 per cent to £429.2 million in the first half of 2013 from £188.1 million in the first half of 2012.

Mobile now accounts for 14.1 per cent of all digital advertising spend – nearly double the 7.2 per cent for the same period last year.

As 4G networks begin to roll out, mobile video advertising grew sharply, up 1,260 per cent from £1.7 million in the first half of 2012 to £23.0 million in the first half of 2013.

“Nothing illustrates the internet as an entertainment platform better than the fact that over one in five minutes online is accounted for by entertainment, and that advertisers spent almost 1,300 per cent more on mobile video than a year ago,” says Tim Elkington, director of research & strategy at the Internet Advertising Bureau.

“With smartphone penetration crossing the two-thirds landmark and the successful roll out of 4G, 2013 could be the year when advertising spend on mobile crosses the £1 billion threshold.”

Consumer goods becomes biggest spender as mobile display hits the big timeTotal mobile display advertising (including video) increased like-for-like by 195 per cent to £150.5 million in the first half of 2013.

Thus, mobile now accounts for 20.4 per cent of total digital display advertising. For the first time, consumer goods became the biggest spender on mobile display, almost doubling its share in a year – from 14.5 per cent to 26.8 per cent in the first half of 2013.

It overtook the long-time number one category, entertainment & media, whose share stayed at 22.9 per cent.

Driven by mobile display and video, the consumer goods sector extended its dominance over the finance sector as the biggest spender on digital display advertising, overall – accounting for 18.2 per cent in the first half of 2013 compared to 15.8 per cent a year earlier.

Finance’s share dropped from 15.8 per cent to 13.7 per cent. Consumer goods’ share has more than doubled in four years (from 8.1 per cent in the first half of 2009).

Anna Bartz, senior manager at PwC, says, “The fact that consumer goods – such as food, clothing and jewellery – account for over one quarter of mobile display advertising shows how important brands regard smartphones as key to consumer buying behaviour.”

“Mobile has moved on from being a communications or entertainment device to a bona fide retail one.

“It’s an interesting contrast to how dominant entertainment has become on ‘fixed’ devices such as computers and laptops.”

Digital advertising formats

Display advertising across the internet and mobile, boosted by video and social media, grew above the overall (17.5 per cent) digital rate at 23.0 per cent on a like-for-like basis to £737.9 million, representing a 24 per cent share of digital ad spend in the first half of 2013.

Video advertising grew an impressive 86 per cent year-on-year to £135.2 million.

In the last three years, video ad spend has increased almost six-fold (487 per cent). In the last year, video’s share of online and mobile display has grown 50 per cent from 12 per cent to 18 per cent in the first half of 2013.

Social media advertising grew 53 per cent to £242.5 million. In the last three years, social media spend has increased almost three-fold (285 per cent).

Paid-for search marketing increased 18.9 per cent on a like-for-like basis to £1.81 billion – a 59 per cent share of digital ad spend.

Within these figures, mobile search grew like-for-like by 101 per cent to £271.0 million – accounting for 63 per cent of mobile advertising.

Classifieds including recruitment, property and automotive listings, grew 6.6 per cent like-for-like to £452.7 million – accounting for 15 per cent of digital ad spend.

Tablets: – among media owners who submitted revenue figures to the IAB and PwC, designated ad spend on tablets³ is estimated to be at least £10.5 million in the first half of 2013; up from at least £2.4 million in the first half of 2012.

* Footnotes

First half of 2012 digital ad spend figures: – for historical comparison; in the first half of 2012, digital advertising grew, like-for-like, by 12.6 per cent year-on-year to £2.61 billion, with a total advertising market share of 30 per cent.

* Methodology for like-for-like reporting:To provide the most accurate like-for-like growth rates, only companies that submitted in the first half of 2012 and the first half of 2013 have been included in year-on-year growth calculations.

¹ Based on The Sleep Council’s “The Great British Bedtime Report” – average Briton sleeps 6 hours 35 mins per night

² Source: comScore, MobiLens, UK, 3 month average ending June 2013

³ Tablet-specific advertising only (i.e. not including internet advertising displayed on a tablet by default)

About the Internet Advertising Bureau

The Internet Advertising Bureau (IAB) is the UK trade association for digital advertising. With over 900 members, most of the UK’s leading brands, media owners and agencies take part in the IAB. Given the rapidly evolving nature of the digital landscape, the IAB works to ensure that marketers can maximise the potential of digital media and mobile devices, helping members engage their customers and build great brands. By disseminating knowledge and fostering dialogue through research, policy guidance, training and events, the IAB aims to be every marketer’s authoritative and objective source for best practices in internet advertising.

About PwC

PwC helps organisations and individuals create the value they’re looking for. They are a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services.

About UKOM

UKOM is the UK governance body for online audience measurement. Its aim is to establish a trusted and effective system for online brand communications planning in the UK through stringent governance and industry education. UKOM ensures that its chosen data supplier comScore publishes the best data available, using methods that deliver accurate and technically-sound information, and keep pace with the market’s needs. The organisation’s remit also includes educating brand advertisers, agenciesvand the media on the value of using accurate person-centric audience measurement to derive meaningful and actionable insight. UKOM is co-owned by the Internet Advertising Bureau and the Association of Online Publishers, and its board includes representatives from ISBA and the IPA.

About comScorecom

comScore (NASDAQ: SCOR) is a global leader in digital measurement and analytics, delivering insights on web, mobile and TV consumer behaviour that enable clients to maximise the value of their digital investments.

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