IAB UK and PwC UK Digital Ad Spend 2018 Study

We were fortunate enough to attend the Digital Ad Spend 2018 session held by Hannah Bewley, Tim Elkington and Michael Phillips, hosted at the IAB offices in London.

The study is put together by PwC, whereby UK media owners submit digital advertising revenue figures confidentially to PwC who then analyse the submissions and produce aggregated data that shows the size of the UK digital advertising market. Any gaps in the data are filled by the work of the Digital Adspend Advisory Board, which includes the major agency groups, and provides estimated figures for any major media owners that do not submit figures directly to the study.

Before the session started, Pam Partington our very own Customer Success Manager  made a list of what she believed would be the trends from 2018. Working closely with our Fluid Ads customers, Pam predicted the following:

• Mobile is King
• Display is growing at a good rate
• Retail is the highest grossing industry
• Pop up advertising is on the decline

We’re  pleased to say that Pam was pretty accurate on her predictions and surprised by some of the other results which we will go into later.

The total UK digital market in 2018 was an impressive £13,44 billion – this is a 15% increase from 2017. Almost all of this growth was attributed to mobile ad spend. So to quote Tim Elkington “2018 was the year of mobile”. He may have been saying this for the last 11 years but it’s no less true now than it was back in 1997. Two thirds of digital time is spent on smartphones, so naturally, more and more spend is directed at mobile. In 2018, we saw 51% of all digital advertising being on smartphones.

Although paid search is still leading the digital media budgets, we have seen accelerated growth for display over the last year. A solid increase of 22%. That’s higher growth than paid search and classifieds. We believe this shows that advertisers are still actively trying to get in front of their clients by appearing on any available sources whilst their customers use and browse the internet. And in correlation, seeing successes in this type of media means more budgets are being put aside to grow their display offering.

Looking into the data in more detail, with a specific interest in display, we saw that 66% of display is on smartphones. To us, that figure was surprisingly high. Although, looking at the rest of the results, we can now see why. This alone shows how vitally important it is to have good, clean, mobile appropriate ads and content.  

Banner advertising saw a good growth of 13% compared to 2017 and still make up a third of the total display budgets. With the introduction of tighter rules around disruptive formats we see ‘pop up ads’ making up only 0.02% of the total display formats. Although sponsored content makes up 3% of the display formats, this is where we saw the biggest growth in 2018. A huge 34% rise. We’re particularly interested in this. It would seem that advertisers are now moving from just pushing product to becoming thought leaders in their market and as such producing more and more sponsored content to help wade out competition. We predict bigger things for sponsored content in 2019.  

You may have noticed one media type not mentioned so far is Out Of Home display. We’re  hearing more and more about OOH display and it’s certainly one to watch however, it has not been included in this study. Michael Phillips, PwC, explained that they simply haven’t received enough data from their sources in order to collate a result. We were surprised by this as it does seem to be on everyone’s agenda but not necessarily out in the public domain. If you are currently running OOH campaigns, please do get in touch with us or the IAB UK and submit your findings for the next report.

Finally, the release of the top performing markets was also discussed. We have seen a rise in consumer goods and retail however, Auto has declined in 2018. This could be for a variety of reasons and we are eager to explore this more with our current clients.

If you have any questions in relation to the study or the results we have gleaned, please do get in touch.

We look forward to another successful year and seeing adspend in the UK continuing to grow.