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Mobile powers surge in UK digital spend

News, 15 April 2016

LONDON: UK digital adspend grew 16.4% on a like-for-like basis in 2015, the fastest rate of increase in seven years, as expenditure on mobile leapt by 60% according to new figures from the IAB.

The latest Internet Advertising Bureau UK Digital Adspend report, conducted by PwC, showed that total spending on digital advertising reached £8.6bn last year, with the majority of growth (78%) coming from mobile.

Mobile spending amounted to £2.63bn and now makes up almost one third (30.5%) of all digital advertising.

Tim Elkington, Chief Strategy Officer at the IAB UK highlighted the growing number of devices people now use to go online as a factor in helping digital ad spend "hit another gear as advertisers look to reach them and time spent online increases".

The average number of such devices per household now stands at 8.3.

Connected TVs saw the biggest rise in ownership (27%), followed by smartphones (21%), whilst laptops (18%) outgrew tablets (16%). Smartphones are the most popular internet device (2.1 per household) followed by laptops (1.6) and tablets (1.4).

While mobile was the fastest-growing format, video and content & native were not far behind.

Video ad spend was up 50.7% to £711m. And video spending on mobile doubled (98%) to £353m as more and more people chose to watch video, TV and film on smartphones.

Content and native advertising spend – which includes "advertorials" and ads in social media news feeds – increased by 49.9% to £776m.

Ad spend on social media sites grew 45% to £1.25bn and now accounts for 41% of banner/video display ad spend; some 71% of social media spend goes on mobile.

In addition to the £8.61bn that was spent on digital advertising in 2015, the IAB identified a further £953m spent on online performance marketing (OPM), which involves attracting customers via activities on 'deal' websites such as price comparison, voucher, cashback, loyalty and product review sites.

While the raw numbers are impressive, some industry figures suggested more context would be useful.

"It's clear the spend is following the eyeballs, but that's just showing the changing nature of the market and how it's driven by how technology is changing consumer habits," Paul Mead, chairman of VCCP Media, told Digiday.

"It's not actually showing that the industry is doing anything better."

Data sourced from IAB UK, Digiday; additional content by Warc staff