The 2018 figures, from the Internet Advertising Bureau (IAB) and PwC’s annual digital ad spend study, appear to demonstrate continued confidence in the sector – which has been seeking to address its misgivings via a series of platform, brand and cross-industry led initiatives.
Analysing UK ad revenue from 64 participants, combined with additional data from Warc, the study also found that for the first time ever ad spend on smartphones overtook desktop to account for 51% of all media budgets.
In total, advertisers spent £6.9bn on smartphone ads, up 2017’s £5.2bn.
The shift in budgets shows a lagging alignment with consumer behaviour, given that Ofcom found smartphones to have overtaken laptops as UK internet users’ number one device in 2015. The path to get consumers comfortable with completing brand transactions on these mobile devices has been slower though; and this year uSwitch predicts that Brits will spend £25bn on goods ordered via their smartphones or tablets in 2019, a 66% rise from 2018.
When it came to display ad spent, the IAB found this to be up 22% year-on-year, reaching £5.2bn and growing faster than paid search which was given a 14% boost, and eclipsing digital classified budgets which diminished by 1%.
Along with mobile, video was found to be a driving force behind digital ad spend, accounting for 44% of the total display market at £2.31bn.
Banner ad spend clocked in at £1.19bn.
76% of all video spend is now on smartphones, and some 57% of video budgets are invested in outstream or social media platforms.
An industry ‘in rude health’
Offering up the ad agency perspective on the report, Jeremy Hine, London chief exec of MullenLowe Group said the key findings showed that the digital industry was “in rude health, despite ongoing debate around the varied issues that come with such a sprawling medium”.
“The report indicates that advertising spend is increasingly representative of real consumer behaviour, as for the first time smartphone ad spend has overtaken desktop,” he added. “This is promising and shows a move towards advertisers truly listening to what consumers are doing, and where they’re consuming media, making for a better ad ecosystem for all.”
Managing director of the recently consolidated VMLY&R London, Amanda Farmer, meanwhile, agreed that the IAB’s findings were indicative of an “industry that was reaching real maturity” evidenced by the surging growth of the smartphone and the rise of video.
As well as updating on budgets, the IAB’s study claimed that companies fully certified for its Gold Standard (which sees members audited and accredited based on a series of best practices around brand safety, ad fraud and transparency) outperformed the total display market – claiming a 30% year-on-year boost to ad spend revenues versus the overall overage of 22%.
Yves Schwarzbart, advertising industry relations manager at Google UK, which is subscribed to the Gold Standard, said it was “encouraging to see is the net benefit advertisers seem to attach to the importance of media owners and tech players adhering to agreed industry standards”.
Despite the praise, some corners of the industry have lamented what they perceive to be a lack of uptake of the standard. The IAB's website indicates that 80 members have been certified so far, with a further 26 registered to do so.
The IAB’s figures follow on from a report from Barclay’s, which forecast UK digital ad spend would hit £15bn in 2019.
Like the IAB, the bank’s report didn’t speculate on how Britain's exit from the EU would impact the digital industry, instead it was is fairly bullish about the market’s prospects even when the range of potential outcomes are factored in.