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UK digital adspend rises to £7.2bn

News, 09 April 2015

LONDON: Digital adspend in the UK increased 14% to a record £7.2bn in 2014, according to the latest figures from the Internet Advertising Bureau (IAB) UK, which attributed the rise to multiple device ownership.

The IAB's latest Digital Adspend report calculated that the average British household now owns 7.4 internet-connected devices while 40% of households own at least one tablet.

About one-fifth (19%) of British homes have two tablets, while 11% own three or more, although smartphones remain the most popular device at 1.7 per household compared with 1.2 tablets per household.

"Advertisers are increasing their digital budgets to reach people as they go online through an increasing array of devices," said Tim Elkington, chief strategy officer at the IAB UK.

"It's a win-win for consumers because digital advertising pays for the wide range of free online services they increasingly rely on in their daily lives, but don't necessarily want to pay much for," he added.

Display took roughly a third (32%) of total digital adspend, after growing 26.4% to £2.27bn in 2014. Elkington put this down to marketers increasingly seeing online as a viable brand awareness advertising medium rather than one for just generating an immediate direct response.

Mobile adspend grew 63% to £1.62bn last year, the report said, and it now accounts for almost a quarter (23%) of all digital adspend, up from 16% in 2013.

Turning to other formats, social media adspend grew 65% to £922m, with more than half of that (56%) coming from mobile, while content and native advertising grew to £509m.

Video advertising increased 43% year-on-year to £442m while mobile video advertising grew an impressive 142% to £164m.

Paid-for-search increased 8.7% to £3.77bn, the IAB said, while classifieds rose 11.6% to £1.05bn, or 15% of total digital adspend in 2014.

Accompanying the report, an online poll of 2,090 UK adults conducted by YouGov explored how much a typical British consumer is willing to pay for communications per month.

YouGov found that the average adult will pay a maximum of £1.53 a month for email, £1.33 to use search engines, £1.10 for video content, 92p for news websites, 88p for social media, 55p for online games and 52p for price comparison sites.

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