Programamtic Social Media IAB

Mobile accounts for more than half of social media spend, says IAB/PwC report


By Seb Joseph, News editor

April 8, 2015 | 6 min read

Advertisers have boosted their digital budgets to reach people online through an increasing array of devices, pushing mobile to account for more than half (56 per cent) of social media spend in 2014 and nearly a quarter (23 per cent) of digital spend, according to the Internet Advertising Bureau's (IAB's) latest Digital Adspend report.

Mobile helped lift social media ad spend up by 65 per cent in the period, according to the report which was conducted by PricewaterhouseCoopers (PwC).

The uplift shows that advertisers are starting to see mobile and social as one in the same. Brands have struggled to fit their media strategies around the ubiquity of mobile but the findings suggest a stronger understanding of how the two channels can work in tandem to monetise those behaviours.

So much so that mobile pulled in nearly a quarter (23 per cent) of digital ad spend in 2014, found the study, which propelled digital spend to a record £7.2bn in the period, a £936m increase on the previous year. Brands such as Tesco, Disney, Seat and Lego have upskilled their mobile expertise over the last 12 months, according to a separate IAB study, highlighting the channel’s influence beyond retail.

A key driver of the growth is the proliferation of mobile devices flooding the market. Nearly four in ten (37 per cent) British households bought a tablet last year, pushing the number of internet devices they house to 7.4, according to YouGov consumer data accompanying the report. One fifth (19 per cent) of households have two tablets, while 11 per cent own three or more. Advertisers clocked the rise and proceeded to pump £87.4m into tablet advertising last year, an 11 per cent increase on what was spent in 2013.

Despite the surge in tablet ownership, they still trail smartphone and tablets in British homes. Smartphones are the most common internet-enabled device with 1.7 per household, according to YouGov, followed by laptops (1.3) and tablets (1.2).

Tim Elkington, chief strategy officer at IAB UK, said the trend was 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”.

Roberto Agosti, mobile manager at Manning Gottlieb OMD, backed the summisation of the research and said it showed a "change in the communication from brands" as consumer behaviours evolve and mobile becomes the dominant player in this cross-screen world".

"The IAB research gives tangible evidence of this phenomenon, highlighting the 63 per cent mobile spend increase across 2014 as well as touching upon the proliferation of tablet devices," said Agosti.

"As our world and devices become more inter-connected, understanding where we are on that journey will be integral in order for brand communications to stay relevant."

With more and more people owning and using a variety of mobile devices, advertisers are under greater pressure to invest in an ever-expanding suite of mobile tools, from programmatic to apps, to dominate the space.

Simon Bailey, chief executive of Telefonica’s mobile advertising exchange Axonix, hailed mobile’s continued success but said early apprehension to the scale of the mobile challenge and the tools on offer was paving away to reveal a new-found confidence.

“The advent of programmatic advertising is undoubtedly responsible for mobile's growth in these figures. It's brought the ability to buy and sell ads in real-time and target audiences with the right messages at scale,” said Bailey.

“What is really exciting is that it's taken a little while to embrace it in mobile, but now it's on the cusp of being wholly adopted. In the next five years, advertising will undoubtedly be led by insights gathered from mobile data. Properly taking advantage of the programmatic opportunity will accelerate both mobile's share of the advertising pie and the UK's overall digital ad spend, which can only be good for the industry and the economy.”

Another key proponent of digital ad growth was display, which has been buoyed by video and social media amid the advent of programmatic trading. Display advertising across online and mobile jumped almost twice the rate of the total digital ad spend in 2014 at 26.4 per cent to £2.27bn, revealed the IAB report. Display now boasts 32 per cent 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.”

Owen Sagness, general manager of Microsoft Advertising and Online UK, said the surge in spend on display advertising signalled the need for more technology to help brands find better ad placements.

"With display advertising now accounting for 32 per cent of digital ad spend, media agencies and publishers must invest in technologies in order to stay ahead of the curve, said Sagness.

"This will enable them to deliver relevant experiences that are in tune with consumers’ changing online behaviours.

Elsewhere, content and native advertising spend hit £509m, more than a fifth (22 per cent of digital display advertising. Video lived up to its billing as the in-demand ad format with spend swelling by 46 per cent to £442m in 2014, a drastic jump from the £53m it accrued five years ago. Mobile video advertising alone grew 142 per cent year-on-year to £164m.

Investment in paid for search marketing climbed 8.7 per cent to £3.77bn in the period. Classifieds including recruitment, property and automotive listings jumped 11.6 per cent to £1.05bn, representing 15 per cent of digital ad spend for the year.

Dan Bunyan, senior manager at PwC, which audited the report, said: “Despite digital’s continued stellar performance, there remains significant growth opportunities to be exploited on mobile and tablet devices. These are the two areas where ownership and usage is extremely high but where advertising investment is disproportionately low. For instance, over half of web pages are viewed via mobile phones but they account for just 23 per cent of digital spend.”

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