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Microsoft Adspend IAB

What the IAB UK adspend report means: Microsoft, Carat, ISBA and more discuss


By Ishbel Macleod, PR and social media consultant

October 8, 2014 | 8 min read

The latest IAB UK and PwC adspend report has been released, showing that digital ad spend is up 16.6 per cent while mobile ad spend has increased 68 per cent.

Mobile accounted for 20 per cent of all digital advertising spend – up from 14 per cent in the first half of 2013, the report found.

But what do these results mean? The Drum caught up with Microsoft, ISBA, Carat, M&C Saatchi Mobile, Quantcast, Vizeum and more to find out.

Owen Sagness, general manager for advertising and online, Microsoft UK

Digital advertising is no longer the reserve of pioneering brands and agencies. Diversification in platforms and formats across devices consumers use every day means that it is inevitable for digital to be a key player in any marketing budget.

With the new IAB Adspend Results for H1 2014 revealing a 16.6 per cent increase year-on-year, the trend of both growth in spend and diversification continues. But with this growth, and trends like the rise of automated buying in programmatic trading, there is a danger for brands to fall into a ‘scatter gun’ approach to digital marketing – trying to do too many things at once and becoming irrelevant in their brand communications.

It’s imperative now, more than ever, for brand marketers to consider the messages we are communicating and where and when those messages are being consumed. In 2014, “context is king”: reaching consumers where they are, on any screen, at any time, with the right message that encourages brand engagement.

We are seeing the appetite for this continue to grow with native advertising accounting for 21 per cent of digital ad spend in the first half of 2014. At Microsoft we understand our audiences and what content works for them across the platforms. By working together, publishers, agencies and brands can build experiences that mean consumers will want to interact, rather than switch off, and maintain this fantastic growth in digital advertising spend, opening up the doors to explore even more possibilities.

Bob Wootton, director of media and advertising, ISBA

IAB’s digital ad spend report shows encouraging trends in digital advertising. As the economy shows positive signs of growth, digital goes from strength to strength. Advertisers are keen to include formats such as native advertising and mobile video in their media spend, which definitely is reflected in IAB’s figures.

It also highlights what dangers need to be addressed given the unprecedented digital growth. Calls for an increased activity and reassurance in brand safety, viewability, improved attribution models and action against click fraud are essential matters for the industry to tackle.

Libby Robinson, EMEA managing director, M&C Saatchi Mobile

The recent IAB results do not come as a surprise, they simply confirm what we have been seeing with our clients mobile spend over the past 12 months. Brands now see mobile as a marketing channel in its own right and more brands are looking for opportunities on mobile, particularly across video, programmatic and social. The 2014 Ofcom Market Report, recorded a 346 per cent like-for-like increase in mobile video advertising revenues (growing from £15.6m to £69.4m in 2013).

We expect this to increase much further and have seen a similar trend with our global clients across retail, tech and travel with mobile video playing a key role in both direct response and brand advertising. The shift towards programmatic buying has also had an impact on growth and we expect to see programmatic accounting for nearly 50% of mobile media spend within the next six months. Coupled with the power of social on mobile, these results show that mobile advertising is being taken seriously by brands, as it should be.

Erin Hudson, digital director, Carat

We are seeing that clients who truly understand digital are increasingly realising that you simply cannot just adapt TV ads for online.

The fact that half of people are watching TV, films or video clips with family, and three in 10 are watching with friends shows that there is a social dynamic to TV viewing. However, when you consider the increased interactivity that digital affords, there is even more potential for amazing work. Marketers need to be jumping on these opportunities.

However, if brands want to stay ahead they need to consider that consumer will continue to desensitise to mobile video advertising. Far more video-based ads being watched diminishes share of mind, making it difficult for any ad to stick out. Brands will have to work even harder to produce successful online video campaigns. It’s then up to the industry and particularly insight and evaluation experts to truly understand effectiveness. As an agency, we are making some great progress here with some our most advanced digital and global brands.

Scott Magee, strategy director, Vizeum UK

The overall picture described in these results confirms - shock, horror! - that consumers media behaviour is defined by what’s going on in their lives – and not vice versa.

The continued rise in mobile spend reflects the desire of agencies and advertisers to make brand communication as easy to notice as possible. Larger ‘mobile’ screens both on smartphones and tablets are helping the industry to make these connections more enjoyable. Meanwhile, the rise of video formats is recognition that a) film has always been the easiest way to communicate a rich brand story quickly and b) that we can deliver high quality film in more places than before.”

Nigel Gilbert, VP at ad-tech company, AppNexus

At a time when notable voices in the industry are questioning the sustainability of the ad funded content model, it’s interesting to see the sustained growth in digital advertising.

As an industry we need to do more to address concerns around viewability, fraud and the effectiveness of digital advertising, but as the switch to programmatic accelerates this in the UK this year, the tools are emerging to better manage the scale and complexity of this cross screen world; bringing us one step closer to realising the true potential of digital advertising.

Matt White, UK MD, Quantcast

Historically, FMCG brands have always taken the lead with exploring new digital marketing opportunities – and this trend continues as they still top the leaderboard in the IAB/PwC’s latest half-year ad spend report.

The growth of video on both desktop and mobile is staggering and it clearly reflects the growth of brand advertising through digital. Brands appear to be trusting in digital as a branding and awareness medium more and more, rather than just relying on it for direct response campaigns, which can only be beneficial for users as they start to engage on a longer term basis with brands across devices.

James Booth, CEO and co-founder, Rockabox

As the UK population continues to move its web browsing away from a desktop environment to tablets and mobiles, it was inevitable that mobile ad spend would start to catch up.

Video as a sector has grown massively but issues remain with the business model - cost per view is struggling in a fraud-filled world, ads are often not viewable and media agencies are challenged to make sense of the best approach. 2014 was the year in-stream, pre-roll video advertising captured the programmatic mindset; 2015 will be the year that rich media starts to make proper sense as a bid-able solution at scale.

Brands are increasingly demanding relevant interactive content experiences delivered to a targeted audience; engaging rich media can offer this in a way that much of the current video ad landscape doesn’t.

Nick Reid, UK MD, TubeMogul

With the IAB/PwC reporting huge growth in areas like mobile and video we can see that digital ad spend is now really starting to reflect consumption behaviours.

The target audience has shifted from TV to digital and mobile devices, watching digital video on the move rather than statically via appointment-to-view TV, and this is something that advertisers are recognising in their droves.

I would predict that next year we’ll also be measuring TV as a digital medium, since the lines between online and offline continue to blur, and broadcasters increasingly explore the option of monetising their inventory via with programmatic channels.

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