The IAB have recently released their 6 monthly digital ad spend figures for the first half of 2014. Last year the industry predicted that the half-year digital paid media spend figure in 2014 would come close to the £3.5 billion mark. It has officially been recorded as £3.462 billion (a 16.6% like for like annual increase). That means we’re now verging on £7 billion by the end of 2014, a far cry from the digital ad spend of £825 million per year in 2004, when the industry started measuring.
The largest areas of growth were in video advertising; it grew by 59% to £202 million in the 1st 6 months. It comes as no surprise that the fastest growing advertising sector is mobile video advertising, which grew 196% and created billings of £63.9 million in the past 6 months. Closely related to this trend is our growing love of watching ‘catching up TV’. The age of watching TV when we want, not because it is on, is completely disrupting the traditional ad industry; consequently 20% of all internet and display ads are targeted toward video content. This figure will continue to grow for the foreseeable future.
More than 76% of us Brits now have smart phones, which helps explain the 68% growth of mobile advertising, from £429.2 million to £707.1 million in the first half of 2014. Mobile advertising now accounts for 20% of all digital advertising spend – that’s up from 14% in the first half of 2013. Unfortunately this does not reflect the number of mobile friendly websites owned by big brands and institutions. There is still a lot of catching up to do, the result being there will be a growing divide between those brands that are keeping up with demand of users and those lacking in investment, strategy or know how.
The sectors that have embraced mobile display advertising more than everyone else are Consumer Goods, allocating 23% of all the spend on this channel. Next up was Entertainment (21%) followed by Technology advertisers (12%); this was probably Programmatic Advertising and Big Data vendors!
A wider range of sectors use display advertising. Again, Consumer Goods are the largest spenders taking credit for 16% of the advertising spend. Travel and Transport was the 2nd largest vertical sector using digital display advertising (15%) and Finance (13%) was the 3rd largest industry.
Social media ad spend grew 73% to £396 million, with 53% (£209.7 million) allocated to mobile. This dramatic increase aligns with the growing role of social networks in our lives. These channels are now officially part of a portfolio approach to providing the right content (adverts) at the right time. With the rise and rise of ‘programmatic’ these figures are simply inevitable.
About 21% of all digital display advertising spend was allocated to Content and “native” advertising spend. It’s a woolly subject area but if you think sponsorships, in-feed distribution, advertising features and the demand for ‘digital PR’ now that dodgy link building is a waste of time, you’ll see how we managed to spend £216 million in the 1st half of this year in the UK alone.
More people are spending money on Classifieds (jobs, cars etc); this normally reflects a growth in the economy. Classified advertising grew by 14% so far this year, which can’t be a bad thing.
The biggest spend, as always, was on paid search advertising, the stuff that all the media lovies don’t want to talk about any more because it isn’t a new headline. Paid search drove £1.92 billion spend (up 11.2% YOY) in the 1st 6 months of 2014. Yup, because it only drives 55% of the entire digital media spend in the UK, and it isn’t growing at the same rate like it has in previous years no one wants to talk about it anymore. Advertising people can be so fickle at times.
