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Mobile accounts for almost half of all digital ad spend, says IAB UK


By John McCarthy, Opinion editor

April 25, 2018 | 6 min read

Smartphone video was the fastest growing advertising format in a market increasingly being dominated by mobile, according to research from the Internet Advertising Bureau (IAB) UK and PwC.

Alexandre Godreau

Mobile spend is up again / Alexandre Godreau

This data point is best illustrated with the news smartphones overtook computers for time spent on the internet for the first time ever. With this, smartphone advertising grew 37.4% to account for 45% of all digital ad spend.

The fastest growing medium was smartphone video. It was up by 69% in 2017, bringing the tally to £1.17bn. Video was an increasingly important part of all smartphone advertising which grew by 37.4% to £5.2bn.

Furthermore, smartphones made up 73% of all video spend which came to £1.61bn across mobile, computers and tablets. That does not mean video is effective however, US research from the CMO Council found that many marketers are unsure how they should measure success on the platform.

Social media spend was on the up too, by 38% to £2.39bn, roughly a fifth of every pound spend in digital. Four fifths of all the budget were directed towards mobile.

Programmatic advertising continued to swell too. 80% of spend on display ads was traded programmatically, an 8% rise on 2016.

IAB figures

Michael Todd, head of advertising industry relations EMEA, Google, said: “Smartphone video outranks any other digital channel with a 69% year on year rise, and with good reason. Advertisers are matching behaviour, as consumers increasingly spend their time on mobile."

He noted that 70% of YouTube video watch time is on YouTube. "As users, we are spending increasing amounts of time on mobile, and video is one of the formats we pay the most attention to. The fact that brands and advertisers are tapping into this reflects the growing understanding of long term brand building alongside short term awareness, and the sales that online video can generate.”

Tom Tryon, strategy manager at PwC, said: “While this data relates to 2017, before some of the recent headlines that have been dominating the industry, it’s clear that there has been considerable momentum in the market.

“What stands out to us is the number of success stories we've seen across a diverse range of formats, from audio to sponsored content, and across all parts of the industry value chain. More than half of the companies submitting to the study this year are in growth, which points to a robust and competitive marketplace.”

All in, the research found that 2017 saw a 14.3% increase in digital ad spend, bringing the tally to a neat £11.55bn.

The industry has reacted favourably to the news.

Barney Farmer, commercial director of Nielsen, said: "News of increased spend on mobile video comes amid a time of disparity and volatility in terms of how the biggest advertisers are spending on traditional advertising. Half spent more and half spent less. These differing focuses are due to many factors, including an ever-present sense of uncertainty in light of Brexit. While the media landscape is more diverse and fragmented than ever, video is leading the way and online is unstoppable.”

Denis Crushell, vice president of Europe, Tubular Labs, said: "All roads point to video. The fact that smartphone video ads are the fastest-growing online ad format shows that brands and publishers are really waking up to the fact that this is where audiences are engaging with content – and about time too. It’s now more vital than ever that companies have a clear online video presence and strategy for connecting with their target audiences... this is just the beginning of astronomical growth yet to come in this channel, so watch this space.”

Fergus Hay, chief executive of Leagas Delaney was not surprised by the news either but tempered it with a warning. "Though it’s tempting to focus on individual channels when data like this is published, we as an industry need to fight the urge to be too channel-focused. We need to be client and customer-focused. After all, 'advertising' isn’t even the right word anymore for what we do.

“At its inception “advertising” focussed on identifying the levers we need to pull with our clients to drive their market growth. These figures need to be interpreted against the wider picture; success isn’t about spend in the market or across channels, it’s about market share growth for clients. Given the current commercial climate, the focus of agencies should be on growing their clients’ businesses with top tier creative ideas that solve real problems that brands face.”

Ruth Manielevitch, director of business development at Taptica noted that consumers have very little attention to advertising, so video that is made has to be delivered to the correct consumers. “80% of spend on display ads was traded programmatically this year – up 8% - reflecting a clear shift towards marketing activities that produce measurable results in real time. It’s no surprise that consumers spend the majority of time online on their mobiles, with video in particular set to demand around 80% of time spent online by next year, and delivering ads programmatically is a cost-effective and efficient way of making the most of budgets in these areas."

Carl Erik Kjaersgaard, chief executive of Blackwood Seven, underlined that it is not just as simple as throwing a video out in the ether. “Marketers must ensure that as they embrace an online world, there is complete transparency when it comes to where ads are placed. This openness has never been more important given the recent brand safety concerns. By using digital viewability metrics that allow marketers to understand the effectiveness of digital advertising investments, they can ensure that spend is accounted for and used in a way that offers the most powerful audience engagement and drives revenue.”


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