IAB UK reports stable digital growth as new media emerges | WARC | The Feed

IAB UK reports stable digital growth as new media emerges

Total UK digital ad spend in 2022 grew 11% year on year to reach £26.1bn, according to the IAB’s latest report on the market that includes retail media for the first time. 

Digital Adspend 2022 measures the size of the digital ad market in the UK and shows that it has stabilised despite economic uncertainty.

Why it matters

Retail media is an emerging medium with its roots in the US but with a significant opportunity in the UK. Given that this is the first year the IAB UK reports on its market size, it’s difficult to gauge the degree of growth we can expect, but it would be very surprising to see it go any way other than up.

On the whole, the IAB’s digital report reflects a return to some of the enthusiasm found in WARC’s late 2022 expenditure report, especially in the digital space, where there appears to be ever more places and techniques through which to advertise. However, there is some slowing versus the first half of 2022 when the IAB reported a 15% year-on-year growth. In short: we’re not out of the woods just yet.

Top line

The UK’s digital ad market saw year-on-year growth of 11% in 2022, despite economic tumult and the demise of Apple’s IDFA. It translates to 56% market growth since the start of the pandemic in 2020.

“This year’s Adspend results reflect a stabilisation of the market growth in line with pre-pandemic levels, demonstrating the robustness of the industry and its ability to weather wider spread economic and political uncertainties,” says Hannah Biernat, senior manager at PwC, which helped produce the report.

“Clients appear to be embracing connecting with audiences in emerging formats as demonstrated by the growth in podcast investment and formats across connected devices.”

Key findings

• Search advertising is the most popular way to spend ad budgets in the UK, growing by 13% to reach £13.1bn over the course of last year.
• UK digital retail media market, defined as advertising on a retailer’s website using their first-party data, is worth £176.4m, according to the report.
• Podcast spend was up 32% YOY to £76.3m, which constitutes a tripling of the amount spent on the medium in 2020.
• Unlikely growers: desktop spend grew 14% versus mobile’s 8%, the first time since 2008, even if the latter accounts for 58% of the market. Display advertising (across social and non-social) was up 6% to £10.4bn; within this, display ads grew 14% while video grew 9%.

Key quote 

“It’s testament to the resilience of digital advertising that the market has maintained double digit growth in 2022 – and astounding that it has grown by 56% since the pandemic began” – Jon Mew, CEO of IAB UK.

Sourced from the IAB, WARC