IAB Smartphone Mobile Advertising

UK digital ad spend smashes £5bn mark in 2012, says IAB/Pwc report


By Jessica Davies, News Editor

April 9, 2013 | 4 min read

UK digital ad spend surged 12.5 per cent like-for-like to hit a record £5.42bn in 2012, with mobile accounting for 10 per cent of spend, according to the latest Digital Ad Spend report from the Internet Advertising Bureau (IAB) and PwC.

The report revealed digital ad spend soared by £607m from 2011 to 2012, taking the total from £4.81bn to a record £5.42bn.

Mobile ad spend fuelled over half of the growth, smashing its own half-billion milestone. Mobile advertising shot up 148 per cent from £203.2m in 2011 to £526m in 2012, according to the report. The £332.7m rise in mobile ad spend comprises over half (53 per cent) of the overall £607.3m increase in total digital ad spend.

IAB director of research and strategy Tim Elkington said mobile has reached this milestone because marketers are becoming more accustomed to the “always on” nature of multiplatform consumer behaviour. “Consequently advertisers are increasingly buying integrated campaigns across online and mobile rather than regarding mobile as an afterthought,” he said.

“In the last six months 20 or more of the UKs’ top 100 advertisers have produced mobile-optimised websites; 4G mobile ultra-broadband is enabling a new era of richer content consumption and tablets are being predicted to outsell PCs in 2013. This will help maintain mobile’s significant momentum in attracting both consumer attention an advertising pounds,” he added.

Mobile advertising surged 1,601 per cent from £0.8m in 2011 to £13m in 2012, while total mobile display advertising, including video, increased like-for-like by 121 per cent to £150m in 2012, according to the report.

Mobile search also saw a 164 per cent like-for-like spike taking the total to £365m and accounting for over two thirds (69 per cent) of mobile ad spend.

The final £11m of mobile ad revenue went towards classifieds, SMS/MMS texts and other small ad formats.

Meanwhile video advertising has seen a six-fold increase in the last three years, up 471 per cent. It grew 46 per cent in 2012 to £160m, accounting for 12 per cent of online and mobile display throughout the year – up 10 per cent from 2011.

Social media advertising saw a 25 per cent spend hike taking the total to £328.4m, having recorded a four-fold increase (383 per cent) in the last three years.

Paid search saw a 14.5 per cent like-for-like increase from £3.17bn to £2.77bn, representing a 55 per cent share of digital ad spend.

Meanwhile 2012 saw the FMCG sector overtake the financial sector as the biggest spenders in digital display advertising, accounting for almost 16 per cent of ad spend in 2012. FMCG’s share has almost doubled in the last three years.

The previous IAB/PwC report published last October revealed the FMCG market had joined the financial services sector as the biggest spenders with both accounting for 16 per cent of display ad spend in the first half of 2012.

Finance has now dropped its spend to just shy of that figure at 15 per cent. Entertainment and media followed at 13 per cent, with retail and technology 12 per cent and 9 per cent respectively.

Last month Matthew Pritchard, head of digital for Europe at FMCG giant Kellogg’s, told The Drum FMCG companies must being to mirror financial services companies in their ability to push data-driven precision marketing.

Other facts from the report:

* Online and mobile sponsorship advertising grew 34 per cent to £65.7m from £49m, accounting for 5 per cent of digital display.

* Online in-game advertising revenue increased 30 per cent to £23.4m from £18m in 2011.

* Classified ads rose 6.3 per cent like-for-like to £853.8m, accounting for 16 per cent of digital ad spend in 2012, while recruitment classified ads saw a 7.6 per cent increase from 2011 to £297.7m.

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