Digital to Take Half of UK Ad Spend This Year

Mobile ad Telegraph March 2015The UK is set to become the first country in the world where digital media will take a 50 per cent share of all ad spend according to eMarketer’s latest media ad spending forecast. Norway and China will follow close behind, with digital grabbing a 45 per cent and 43.6 per cent share, respectively, of ad spend in each country. However, the UK will retain its lead by this measure until 2018, when digital’s portion of total ad spending in China will become the largest worldwide.

Total media spend in the UK is estimated to grow by 6 per cent in 2015 to top £16.3bn, with the spend split equally between digital and all other traditional formats – TV, print, outdoor and radio – combined. Ad spend on mobile and online devices will attract more than twice the ad spend that goes to TV, which will account for a 24.9 per cent share this year, eMarketer estimates.

Digital ad growth in the UK will be driven mostly by spending on mobile, which is expected to rise 45  per cent this year to over £3.3bn, up from around £1.2bn in 2013, eMarketer estimates. (The PwC/IAB UK mobile ad spend figures for the whole year 2014 are released on 9 April.) This year alone, mobile will account for 20.1 per cent of total media spending in the UK, compared with 16.6 per cent for print. In 2016, mobile will surpass TV’s total, at 25.6 per cent of all spending, compared to TV’s 24.1 per cent.

By way of comparison, figures from Carat released earlier this week suggested that digital would account for 48.2 per cent of total UK ad spend this year, with mobile ad spend increasing by 55.3 per cent.

“Digital reaching the 50 per cent threshold in the UK is a significant moment for the ad industry, and digital’s dominance is particularly interesting when compared with the global splits, as well as the splits in some other notable regions,” said eMarketer analyst, Bill Fisher. “Digital accounts for a 29.6 per cent share globally and just over 31 per cent in the US, for example. The UK ad market is notable for its aggressive embrace of online advertising and its rapid adoption of mobile advertising. Because so much TV and radio programming appears ad-free in the UK, the comparative spending on digital channels has always been high. This year, though, we’re set to see digital reach an inflection point.”

Ad spend on TV, meanwhile is expected to rise 3.2 per cent in the UK this year to more than £4bn, although its overall share of the market will fall to less than half that of digital media. By 2018, digital’s share of UK total media ad spend will rise to 56.5 per cent, compared with 22.4 per cent for TV, eMarketer estimates.

The biggest casualty of the surge in UK digital advertising has been traditional print media, with newspapers and magazines struggling to hold on to their market share. This year, print ad spend in the UK is expected to fall 3.9 per cent to less than £2.7bn.

eMarketer bases of its forecasts on a multipronged approach that focuses on both worldwide and local trends in the economy, technology and population, along with company-, product-, country- and demographic-specific trends, and trends in specific consumer behaviours. It analyzes quantitative and qualitative data from a variety of research firms, government agencies, media outlets and company reports, weighting each piece of information based on methodology and soundness.