UK digital adspend up 12.5% to almost £5.5bn

"There's simply so much buzz around mobile. In the last 6 months, 20 more of the UK’s top 100 advertisers have produced mobile-optimised websites; 4G mobile ultra-broadband is enabling a new era of richer content consumption with tablets predicted to outsell PCs in 2013². This will help maintain mobile’s significant momentum in attracting both consumer attention and advertising pounds.”

Even without a prevalent 4G network, mobile video advertising grew 1,601% from £0.8 million in 2011 to £13.0 million in 2012. Total mobile display advertising (including video) increased like-for-like by 121% to £150.0 million in 2012. Mobile search grew like-for-like by 164% to £365.0 million – accounting for 69% of mobile ad spend. The remaining £11million of mobile ad revenue is primarily accounted for by classifieds, SMS/MMS and other smaller advertising formats.

Digital advertising formats

Display advertising across the entire digital landscape, boosted by the increase in video and social media advertising, grew in line with the market at 12.4% on a like-for-like basis to £1.30 billion from £1.14 billion in 2011, representing a 24% share of digital ad spend in 2012.

Video advertising grew 46% to £160.0 million from £109.0 million, accounting for 12% of online and mobile display in 2012; up from 10% in 2011. In the last threeyears video ad spend has increased almost six-fold (471%).

Social media advertising grew 24% to £328.4 million from £265.0 million. In the last three years social media spend has increased almost four-fold (383%).

Online and mobile sponsorship advertising grew 34% to £65.7 million from £49.0 million, accounting for 5% of digital display. In the last threeyears digital sponsorship spend has increased 128%.

Online in-game advertising revenue grew 30% to £23.4 million from £18.0 million in 2011.

Paid-for search marketing increased 14.5% on a like-for-like basis to £3.17 billion from £2.77 billion – representing a 58% share of digital advertising.

Classifieds grew 6.3% like-for-like to £853.8 million from £788.0 million – accounting for 16% of digital ad spend in 2012. Recruitment classifieds showed strong growth of 7.6% from £276.6 million in 2011 to £297.7 million in 2012.

FMCG overtakes finance as top advertiser category

The consumer goods sector (FMCG) overtook the finance sector as the biggest spender on digital display advertising – accounting for almost 16% of display ad spend in 2012. FMCG’s share has almost doubled   in the last three years – from 9% in the first half of 2009 – as FMCG marketers have realised digital’s ability to deliver brand awareness, particularly as an amplifying element in integrated media campaigns.

Anna Bartz, Senior Manager at PwC, said: “The advertising market is shifting toward storytelling and integrated campaigns which give greater prominence to video and display formats with a higher degree of interactivity with the target audience. Over the past two years, the digital advertising revenue model has also changed from an emphasis on direct response to being more about branding and awareness.”

The top five display advertising sectors in 2012 are completed by finance (15%), entertainment & media (13%), retail (12%) and technology (9%).

In comparison, across mobile display only, entertainment & media are the top spenders (accounting for 16% of mobile display only) followed by consumer goods (13%), retail (12%), finance (12%) and technology (11%).