Digital advertising has been growing fastest in nine years, jumping 17.3% to £10.3 billion in 2016. That’s according to a new report from the Internet Advertising Bureau UK (IAB) / PwC. The growth is largely driven by mobile and mobile video adverts.
The report finds that smartphones now make up approximately half (48%) of all UK Internet time. Unsurprisingly, mobile advertising spending has increased 50.8% to £3.87 billion. It now accounts for 38% of all digital ad spend, up from 4% five years ago.
Interestingly though, it accounts for 63% of video spend and 76% of content and native or 79% of social media spending.
IAB also found that mobile video ad expenditure more than doubled to £693 million in 2016. That makes it the fastest growing advertising format, accounting for 29% of total growth in digital ad expenditure.
The results are a reflection on YouGov data which show that 54% of British smartphone users have been viewing videos on their phones over the last six month. Two in five users said they are now viewing more videos this way than a year ago.
17% also viewed TV programmes and films on their smartphones – a behavior prevalent among 18-24 year-olds. 75% of them viewed short clips whilst 44% watched TV shows and another 33% viewed movies on mobile.
Interestingly, six in 10 of those viewing short clips, did so whilst out.
This has led to some astonishing growth among mobile and video content, James Chandler, Chief Marketing Officer for the IAB UK admits.
“Reaching the £10 billion threshold has been made possible by brands breaking the mould, trying innovative formats and making the most of video to reach and amaze people. It’s impossible to ignore the issues the industry is facing at the moment, but digital never stands still and these figures are testament to the long term strength and power of digital.”
Total video on mobile and desktops rose 56%, driven by outstream and social in-feed content to £465 million. Outstream now accounts for 43% of all video spend, but 56% of mobile video.
Pre- as well as post-roll video ad expenditure meanwhile jumped 12% to £603 million taking a 55% of all video ad spending.
Sebastien Bardin, Sony Mobile’s European senior digital marketing manager, says:
“Online video is becoming a bigger priority, providing an impactful and cost-effective incremental reach. In particular, outstream video is great for engaging with our target audience in premium, trusted and viewable environments without disrupting their media consumption or being too intrusive.”
Display also saw some positive growth over the last year at 26% to £3.77 billion. 72% of this was traded programmatically with direct deals and private marketplaces taking the lead.
Social media ad spend rose 38% to £1.73 billion and now accounts for almost half of display. On mobile, social media spending jumped 54%.
Content and native advertising spending increased 28% to £1.17 billion.
Dan Bunyan, Senior Manager at PwC says that programmatic direct reflects the largest change in display advertising trading.
“Right now, considerations such as brand safety mean the advertiser is rightly demanding more certainty in the placement of their ads and the industry is evolving quickly to find new solutions to address brands’ needs in this dynamic environment.”