UK digital ad spend reached £8.61bn in 2015
As the number of smartphones and connected TV's increase in the UK, advertisers are spending more money on digital advertising to reach consumers, with a total spend of £8.61bn in 2015 alone. Mobile advertising accounted for 78% of this digital ad spend growth,worth £2.63bn as people increasingly use their smartphones to complete tasks traditionally carried out on a desktop. Spending on digital advertising is expected to grow in line with the number of online devices and up to 90% of display ad sales are expected to be traded programmatically by 2019.

UK advertisers spent a record £8.61bn on digital advertising last year, with ad spend on mobile devices driving the majority of this growth, plus ownership of connected TVs also influencing spending patterns, according to a report published today (14 April) by the IAB.

The figures were revealed in the latest Internet Advertising Bureau UK Digital ad spend report, conducted by PwC, revealing a 16. 4 per cent year-on-year rise in spend - the highest rate since 2008 (17.1 per cent).

The survey also revealed that the surveyed saw connected TV ownership register the biggest rise (27 per cent) followed by smartphones (21 per cent), whilst laptop ownership also grew 18 per cent, outgrowing tablet ownership (16 per cent%). Smartphones are the most popular internet device (2.1 per household) followed by laptops (1.6) and tablets (1.4), according to the annual study.

Mobile accounted for the vast majority of growth, accounting for a 78 per cent rise year-on-year, of digital ad spend growth, increasing 60.3 per cent during the period to hit £2.63bn – up to 30.5 per cent of all digital advertising (see chart below for a further breakdown).

Majority of display now programmatic

Display ad spend rose 24.5 per cent year-on-year, accounting for 35 per cent of all digital ad spend - equating to £3.03bn, while the share of such ads traded programmatically rose from 47 per cent in 2014 to 60 per cent (£1.6bn) in 2015.

Meanwhile, direct sales – where ads are bought at fixed prices directly from media owners using manual processes – now represent just 37 per cent of display ads (down from 47 per cent) while ad networks make up the remaining 4 per cent.

Paid-for search still accounts for the majority of all digital spend growing 15.3 per cent during the period to hit £4.36bn. Classifieds, including recruitment, property and automotive listings, grew 5.2 per cent to £1.11bn (13 per cent share).

Commenting on the numbers, Tim Elkington, IAB chief strategy officer, said: “The increasing array of devices people use to go online has helped digital ad spend hit another gear as advertisers look to reach them and time spent online increases.

“Smartphones are the major driving force behind this, as people increasingly use them for activities they used to do on desktop, from searching and shopping to social and watching video.”

Dan Bunyan, senior manager at PwC, added: “We’re seeing a three-pronged change in media owner strategy when it comes to selling display ads.

“There’s a shift in sales from networks to real-time-bidding exchanges, a shift from direct to programmatic direct, and one from open to private market places. It’s almost gone full circle in terms of the desire for a more controlled environment to sell in. We predict programmatic will account for 80-90% of display ad sales by 2019.”