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Digital advertising is still 'strong, rapid and large' …and we’ve only just begun

Guy Phillipson is chief executive of the Internet Advertising Bureau UK (IAB). His monthly blog examines the latest developments in the online ad space.

At the IAB, we’ve just come down from cloud nine after our tenth Engage conference – which most agree is our best ever. And, even as digital advertising passes £7bn for 2014, the conference theme ‘We’ve Only Just Begun” couldn’t have been more appropriate.

Sir Martin Sorrell at IAB Engage

At the very first IAB Engage in 2005, Sir Martin Sorrell marked everyone’s card by declaring the move to online was “strong, rapid and large”. Well it still is. Sir Martin returned this year to stress WPP’s priorities of content and programmatic (a term unheard of in 2005), as online and mobile shape up to be perfect for both branding and direct response. Let’s pick out the formats and measures to prove that statement:

  • Display is growing at 30 per cent to pass £2bn this year
  • Video is 20 per cent of display, but growing at 60 per cent
  • Mobile video is booming at +196 per cent
  • Branded content and native make up 21 per cent of display
  • Consumer goods (including FMCG) is the highest spending category across online and mobile display

All good for branding, and on the direct response side:

  • The UK is the most advanced nation for programmatic, which is likely to surpass 40 per cent of all display this year.
  • Oh, and I predict PPC search will hit £4bn on its own, even if its growth at 11 per cent is a third of display’s performance (30 per cent)

That’s all very interesting, but the bigger story is the Enders Analysis forecast for time spent online, which from 2012 (19 billion hours) will more than double to 39 billion hours by 2020. This is all thanks to our friend the consumer, who’ll be spending the majority of his or her time online using smartphones and tablets.

So, by the end of the decade (which is a hop, skip and a jump away) time spent online will double. We’ve only just scratched the surface of what’s possible on mobile; we’ve just pressed the detonator for the video explosion; and we’re in the foothills with the potential of intelligent data targeting across programmatic.

Eileen Naughton, the new Google MD, called it right when she said “the rules of media are being rewritten in the UK”. And if you want the full Sir Martin Sorrell quote from IAB Engage 2005, it was “It’s strong, rapid and large – and it’s happening right now”.

It sure is

And that’s why I love this job.

Guy Phillipson is the UK chief executive of IAB. You can follow him on Twitter @GuyPhillipson

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