Retail accounts for 14.2% of digital advertising spending in the UK in 2017

UK retailers will drive mobile and digital ad spending in 2018, according to a new eMarketer forecast of cross-country UK ad spend.

The research firm tracks five industries, including automotive, consumer packaged goods (CPG) and consumer products, financial services, retail and travel. Among them, the retail sector will account for 14.2% of all digital ad spending fuelled by the rise in eCommerce. Ad investments were up 13.4% this year to £1.55 billion.

eMarketer predicts that this growth will continue into 2018, with retail accounting for 14.5% of digital ad expenditure.

Mobile advertising in particular has nurtured growth with investments jumping 31% to £1.04 billion. As such, mobile represents over two-thirds of digital ad outlays this year.

Monica Peart, senior forecasting director at eMarketer, says:

“The retail sector has a wide array of product categories, ranging from household staples such as groceries to highly popular consumer electronics and gadgets. This helps to not only push retail ad spending above other sectors, but also makes it one of the fastest growing categories with pure-play eCommerce giants such as Amazon pushing advertising investments online and on mobile, where the shopper is increasingly making purchase decisions.”

The remaining tracked industries in the UK will also boost their digital ad spend, however, at slightly lower levels.

Automotive and CPG products are representing the largest gains at 11% each, followed by travel and finance (9%). Similar to retail, mobile ad expenditure is increasing by over a quarter this year among these industries, ranging from 27% for travel to 30% for automotive.

What’s different about each sector is which formats they will choose. Peart explains:

“Search ad spending represents an important format for sectors that traditionally have bigger-ticket items, like autos, travel purchases and certain consumer electronics. Shoppers tend to spend more time looking for information ahead of their purchases in these categories, giving marketers an opportunity to reach shoppers – often through the use of keywords – in a relevant way.”

However, video formats are also pushing ahead within sectors that have so far relied on television ads.

“Online video has become a way to invest in digital through a familiar format – one similar to TV, that is,” Peart adds.