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October 10, 2012

Digital advertisement spending in UK to reach £5bn this year: report

Mobile advertising recorded a whopping 132% to £181.5m during first half of 2012 over the same period last year

By CBR Staff Writer

Despite the difficult economy, spending on digital advertising in the UK is expected to touch £5bn in 2012, according a report commissioned by Internet Advertising Bureau UK (IAB) conducted by PwC.

Advertisement spending on the internet and mobile phones increased by 12.6% during first six months to £2.59bn from £2.3bn spent during corresponding period in 2011.

Mobile phones accounted for 7% of all digital advertising spending with smartphone ownership in the country hitting 58% of the UK population in June 2012.

Mobile advertising recorded a whopping 132% to £181.5m during first half of 2012 over the same period last year.

Spending on display, video, SMS and MMS advertisements on mobiles increased by 91% to £49.9m while mobile search increased by 152% to £131.6m accounting for 72% of mobile advertisement spending.

Internet Advertising Bureau director of Research & Strategy Tim Elkington said almost 60% of people in the UK have a smartphone, average UK household broadband speed is now 9MB and social media accounts for one fifth of all internet time.

"As digital technology and services evolve to make consumers’ lives easier, more connected and more fun, it’s no surprise that advertisers are coming to the digital party with bigger budgets, despite the challenging economic times elsewhere," Tim Elkington said.

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"However, there’s still plenty of room for growth. Take mobile; 60% of the UK’s 100 biggest advertisers still don’t have a mobile-optimised website yet consumers spend almost 70% longer on sites which are."

"If all advertisers get wise to this, we’re likely to see significant mobile growth for some time yet."

Display advertising spending across the internet and mobile grew by 10.6% year-on-year to £590.9m from £534.7m led by an increase in video and banners in social media, accounting 23% share of digital ad spend.

Spending on digital video advertising accounted for 12% of online and mobile display in the first six months of 2012, increasing 43% to £69.8m from £49m.

Paid-for search advertisement spending increased 15.9% during the period to £1.5bn from £1.3bn recorded during last year, representing a 59% share of digital advertising.

Spending on classifieds grew 7.2% to £427.1m from £391.5m; representing 16% of digital ad spending in the first half of 2012.

The consumer goods (FMCG) sector and finance sector were the big spender on digital display advertising – both accounting for almost 16% of display ad spend in the first half of 2012.

PwC Senior Manager Anna Bartz said for the first time since the company has started measuring Digital Adspend, consumer goods (FMCG) advertisers have joined the long-time leader, Financial Services at the top of the spending charts.

"Interestingly, spend by FMCG advertisers increased across all digital channels, reflecting advertisers’ recognition of online and mobile as brand building platforms," Anna Bartz said.

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