Digital advertising growth reached a nine-year high in 2016

A new report from PwC and IAB UK suggests that the rise of mobile and online video is behind the rise

Digital advertising growth reached a nine-year high in 2016

From enjoying podcasts to watching YouTube videos, smartphones and tablets have provided new ways for people to consume content. And these changing media habits are certainly something advertisers have noticed. In fact, a new report has singled out the rise of mobile technology as the key driver behind the growth of digital advertising budgets last year.

The new report from the Internet Advertising Bureau UK (IAB UK), the trade association for digital advertisers, and PwC, the professional-services provider, has revealed that digital advertising spend grew by 17.3% to £10.3bn in 2016, the highest annual growth in nine years. And with mobile advertising spend having grown by 51% to £3.87bn, it was one of the main reasons behind the surge. This is hardly surprising, considering that IAB has reported that almost half of internet time in the UK is spent on smartphones. Mobile now accounts for 38% of all digital ad spend, up from 4% five years ago.

The research also revealed that mobile video ads were the fastest-growing ad format, with spending up by 103% to £693m last year. During the same period, investment in paid-for search – which is when advertisers pay to ranked at the top of search engine results – grew by 15% to £4.99bn. This represented 48% of the total digital ad spend.

2016 was also the year that advertisers ramped up their efforts to catch the attention of audiences on social media. Last year, ad spend on platforms like Snapchat, Facebook and Instagram grew by almost two-fifths to £1.73bn. Again, a lot of this growth was due to people’s increasing use of smartphones and tablets, with mobile social media ad spend having grown by 54%.

Commenting on the report, James Chandler, the chief marketing officer at IAB UK, said: “The rise in people consuming mobile and video content has accelerated digital’s growth rate to its highest level for nearly a decade. Reaching the £10bn threshold has been made possible by brands breaking the mould, trying innovative formats and making the most of video to reach and amaze people.”

With more and more advertisers clamouring for people’s attention on mobile, we certainly hope that their creativity matches the size of their wallets.

Eric Johansson
Eric Johansson

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