LONDON: Digital formats helped drive UK adspend 3.9% higher in the fourth quarter of last year, the highest grossing quarter on record, according to the Advertising Association/WARC Expenditure Report.

Internet spending was up 15.3% during the quarter, and 13.4% over the year, pushing the annual total to £10.3bn. Mobile took a 37.5% share of this, hitting £3.9bn for the year and accounting for almost all (99% ) of the new money spent on internet advertising.

"The UK's ad industry is experiencing the most seismic shift since WARC monitoring began in 1982," said James McDonald, senior data analyst at WARC.

"Last year exemplified this as over 95% of the new money entering the market came from digital formats. The trend will continue as ad tech improves and consumers spend more time with their internet-connected devices."

The Advertising Association/WARC Expenditure Report is the definitive measure of advertising activity in the UK, being the only source that uses advertising expenditure gathered from across the entire media landscape, rather than relying solely on estimated or modelled data.

Revenues from online ads were up for national newsbrands (+4.9% to £230m) for the fifth year running, although those for regional newsbrands declined (-3.4% to £193m). Digital ad revenues for magazine brands were flat ( +0.2% to £282m).

Out-of-home digital spending is not included in the internet total but this too saw a surge in the fourth quarter, as a 22.7% increase boosted the sector's total revenues by 2.0%; over the full year OOH expenditure rose 4.5% to £1.1bn, with digital accounting for 38% – double its 2012 share.

Television adspend dipped 2.1% in Q4, though this was counter-balanced by rises earlier in the year, resulting in 0.2% growth for 2016 as a whole, to £5.3bn: a new high. Video-on-demand revenue grew 12.6% although at £197m this remains a very small part of the total.

In real terms, after accounting for inflation, UK adspend topped its pre-recession peak for the first time during both the final quarter and for 2016 as a whole. Forecasts for the next two years indicate continued growth of 2.5% in 2017 and 3.3% in 2018.

"Advertising has proved resilient to uncertainty and behind these numbers is a cutting edge, digital business in which Britain is a world-beater," said Stephen Woodford, chief executive at the Advertising Association.

Data sourced from Advertising Association, WARC