Digital ad spend up 5 per cent in H1 2023 – IAB UK/PwC report
- Tuesday, October 24th, 2023
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The UK’s digital ad market attracted £13.8bn of spend in the first six months of 2023, according to IAB UK and PwC’s half-year Digital Adspend update. The data shows that investment in digital advertising remained resilient, with total growth of 5 per cent year-on-year, despite a volatile economic backdrop, fuelled by high inflation.
The H1 Digital Adspend update is conducted by IAB UK/PwC and is based on modelled data for the digital ad market between January and June 2023. It provides a condensed half-year update on key stats from the full year Digital Adspend report which is released every April. The update includes spend data for search, display (video and non-video), classified, mobile, non-mobile and other.
Spend on video ads saw the strongest growth – up 11 per cent – as advertisers increasingly harnessed the brand-building potential of the format. The growth in spend is in line with the popularity of short-form video content, with Ofcom’s Media Nations report showing that over a third of UK adults watch short-form online videos daily, rising to 68 per cent of 15-24 year olds. Overall, spend on display formats (including both video and non-video) grew by 8 per cent year-on-year.
Meanwhile, search ads continued to attract the lion’s share of investment, accounting for 50 per cent of the total market. The category grew 5 per cent, attracting nearly £7bn across the first six months of 2023.
Classified ads were the only format to see spend decline, with a fall of 13 per cent, although this is markedly less sharp than the 21 per cent fall seen in H1 2022. When it comes to split by device, spend on mobile ads grew by 9 per cent, with non-mobile formats remaining flat.
“The results we’ve released today reflect two things – that the digital ad market isn’t immune to wider economic pressures, but also that it’s repeatedly resilient in the face of challenging circumstances,” said IAB UK CJOn Mew. “Over the years, we have become used to seeing extremely strong growth, and there is no getting away from the fact that spend has slowed so far this year. And yet the industry is still growing despite the UK’s soaring inflation, the threat of recession, and the impact of structural changes, such as the removal of IDFA.
“It’s particularly encouraging that video formats are seeing strong investment. Advertisers are increasingly harnessing the creative power of digital channels to bring campaigns to life and deliver long-term results, and we see this reflected in robust video investment. As we head into the final months of 2023 and the lead up to Christmas, advertisers should be doubling down on a digital-first approach to make an impact, drive results and resonate with consumers where they’re choosing to spend their time.”