During the 2016 retail year, the UK increased spending on digital advertising by an incredible 17%. The £10.3 billion budget makes it the fastest growing industry in nearly a decade.
Increased Volume on Ad Spend
This volume of spending has only been surpassed one time before. In 2007, it grew by 38% but never breached the £10 billion level. Reports from IAB UK state that this increase is driven by consumer’s use of their mobile devices.
The Role of Mobile Devises in Ad Spend
Reportedly, about 50% of UK internet use is via the smartphone. With this much of their market exposure relying on small, handheld devices, advertisers need to adapt their marketing.
Ad spend industry-wide on mobile marketing increased by nearly £4 billion – a 50% increase. This means that, in 2016, the UK spent 38% of its digital advertising on mobile ads. Mobile videos account for £693 million of that amount.
The IAB UK’s CMO, James Chandler, states:
“The rise in people consuming mobile and video content has accelerated digital’s growth rate to its highest level for nearly a decade.”
He went on to credit the 17% growth to the commitment of brands to break from traditional advertising. Their movement to “innovative formats” and use of video engages more customers, creating dynamic marketing. Methods such as influencer marketing have also contributed heavily to the growth of the market.
Many of these statistics come from YouTube, which reports that over 50% of viewers use their smartphones. There have, historically, been questions regarding accountability with this platform. Regarding this, Chandler says:
“It’s impossible to ignore the issues the industry is facing at the moment, but digital never stands still and these figures are a testament to the long-term strength and power of digital.”
Chandler is not the only marketing expert to recognise the rise of handheld digital. CEO of M&C Saatchi Mobile, James Hilton, says:
“There are lots of moving parts to this; advertisers, agencies and consumers all play a role in a safe, open, and most importantly free, internet. All the data and tools available mean advertising should be better and safer, and this is a key area of focus for us. However although mobile now dominates time spent online, this is by no means a mobile problem. One of the main issues is the industry still thinks desktop first when it comes to brand safety and ad fraud, therefore platforms and standard must evolve to mirror the mobile-first consumer.”
In addition, Gareth Owen of Roast says of Google transparency:
“Whether that be via placement reports using anti-fraud partners or by reporting margins transparently, partners, suppliers and agencies should be more accountable than ever before, to ensure any fraudulent activity is a minimised as possible.”
Confirmation of Mobile Use
YouTube is not the only platform reporting such an increase in mobile viewing. YouGov reports that two out of every five Brits say they use their smartphones more than they did just a year ago. That is a 54% increase. In fact, 75% of the young adult market watches short videos on their smartphones, compared to 44% who watch television, making this a crucial market for ad spend.
Even more compelling are the observations of Sir Martin Sorrell of WPP, who called mobile an “untapped multi-billion dollar opportunity” being handicapped by lagging technology.
“People are spending about a quarter of their time on mobile, and yet it only accounts for 12% of spending. That’s out of kilter and it has to change. Technology, bandwidth, the devices, the screens are not big enough, not good enough yet. There’s a lot of technological development to come.”
Digital marketing ad spend is beginning to catch up to the market. Projections are that this will continue to grow at an incredible pace.