Putting a figure on the value of ad-supported digital services

Free, ad-funded digital services – such as email, social media, online news and streaming services – are worth an average £14,600 per year to every UK household, a new study from IAB UK finds.

Why ad-supported digital services matter

The figure from the industry body represents ‘consumer surplus’, or the value that people place on ad-funded digital services being free. And in the current cost-of-living crisis, 70% of UK adults say it’s important to them that online services are free – indeed, over a quarter of people have used free online entertainment more in the last year as a result of budgets being squeezed, according to The Digital Dividend*.

Takeaways 

• Business investing in digital advertising in 2022 saw a combined total of £73bn in increased sales as a result, with £26bn of that among small and medium-sized companies.
• For every £1 spent on digital advertising, £4.80 was delivered back to the economy in GVA.
• The digital ad industry contributed a total of £129bn in gross value added to the UK economy in 2022, with £39bn directly generated by businesses within the digital advertising sector.

The IAB UK take

“Having a deeper understanding of [the contribution of the digital ad industry and how people value the services it funds] is particularly important at the moment, with 85% of the population worried about rising inflation and the Government considering how to further regulate the digital ad sector. This can only be done effectively if the very real benefits that digital advertising delivers for people and businesses across the country are recognised and protected” – Christie Dennehy-Neil, Head of Policy & Regulatory Affairs at IAB UK.

* The study, conducted by Public First, draws on a mixture of new economic modelling, data analysis and consumer opinion research.

Sourced from IAB UK