eMarketer’s UK Digital Ad Spending Report – key insights
eMarketer recently released their UK Digital Ad Spending Report which looks at how investments in digital budgets have changed and are forecast to change by 2017. The report is currently offered as a free download courtesy of Wildfire by Google (registration required).
I’ve pulled out the key insights and pertinent facts that I took from the report which contains some great graphs and charts.
- UK digital advertising spend will eclipse non-digital ad spend in 2016 due to the growth in mobile.
- Google will continue to dominate UK search revenues, but will also experience growth in display revenues, primarily due to YouTube.
- Ad agencies need to fill knowledge gaps in order to effectively sell mobile ads to clients.
- Internet videos offer an opportunity for brands as they provide a different experience for customers and demand is high.
DIGITAL AD SPENDING
UK search advertising is slowing with digital advertising growing at a faster pace. This is largely due to “publisher sites with large display space inventories—such as news providers, but also Google sites (particularly YouTube), Facebook and Yahoo!”. These display properties “are starting to challenge search as the first port of call for internet users.”
“eMarketer expects investments in online and mobile ads to exceed total expenditure on nondigital advertising forms in 2016”.
Print spend is forecast to fall almost 16% between 2012 and 2017.
Huge growth in mobile ad spend is forecast – 23% of total media ad spending in the UK in 2017, up from 3.9% in 2012.
“Digital ad spending per UK internet user will increase by nearly 52% between 2011 and 2017 to reach an estimated £161.66 ($256.60)”.
“Video ad spending will soar by more than 325.8% over the forecast period, rising from £244 million ($387.3 million) in 2013 to nearly £1.04 billion (almost $1.65 billion) in 2017”.
“Combined, Google and Facebook will take in nearly 52% of UK total digital ad spending by 2015”.
“Younger smartphone users remain the most engaged audience for companies advertising on mobile” particularly the 18-to-24-year-old age group who were significantly higher than other research respondents for both reading social network posts from brands, organizations or events “(56.2%, vs. 35.5% total respondents) and for web or app ad recall (38.1% vs. 26.5%).”
UK agencies are also expressing a good understanding of the technologies needed to successfully launch mobile campaigns. “Lack of client understanding around mobile advertising” was the prime concern by a large margin. Other challenges expressed by agencies were a lack of experience with responsive design, a lack of understanding of mobile privacy issues, and no experience of mobile-sponsored content.
“49% of agency respondents in the IAB UK’s survey said they had “no experience” with real-time advertising on mobile”, despite research by Aimia in 2012 that indicated that UK respondents were more predisposed to location-based offers than their counterparts in North America.
Display advertising remains a challenge on mobile. Customers will be looking for an increasingly personalised experience which calls for new models to be developed.
UK consumers appear to be receptive to video ads. Data from in-stream video advertising company AdoTube showed that “63% of standard pre-roll ads and 59% of interactive pre-rolls encountered in 2012 were played to completion”.
In a poll by digital video advertising platform provider BrightRoll in July 2013, “62% of UK agency executives said they thought video ads were more effective than standard display types such as banners.” The challenge is in demonstrating how effective video ads are “compared with social media, direct response, TV, and search ads.”
Demographic targeting criteria accounted for 65% of UK video ads served during the measurement period of a study conducted by Videology. Advanced targeting options such as location-based targeting, time of day and behavioural methods accounted for 26%.
Agency execs felt that the most significant factor that would lead to advertisers increasing their digital video ad spend was “research on success metrics/proven ROI”.
The rollout of 4G networks in the UK may increase the percentage of video ads viewed on mobile devices as the research currently shows most of these are watched on a desktop or laptop.
Interestingly, a May 2013 poll by QuickPlay Media found that UK consumers were more predisposed to video ads with 23% indicating they would pay more attention to a mobile video ad than one on television, and 22% finding them more appealing than TV ads, indicating that this medium could prove very effective for brands if done well.