How Digital Spend has Impacted the UK Ad Market

April 14, 2016

Across the board, agencies are spending much more on digital advertising throughout the U.K. This should come as no surprise – this trend has been notable for the past five years, and Britain appears to have embraced digital advertising with particular fervor. Digital advertising in the UK was worth around $5.65 billion in H1 2015, an increase of 13.4 percent from the previous year. Total ad spend is expected to grow by more than 9% in 2016 as well, fueled primarily by new digital efforts. As predicted, more than half of UK ad spend has become digital.

So we are continuing to see a large amount of money pouring into the UK ad market, increasingly focused on digital efforts. While this is good for the market as a whole (barring any future ad bubble), it does create challenges more unique to the UK market, which include:

  • Digital or die: With so much attention focused on digital, more traditional forms of advertisement are getting far less money and distribution. This can make it challenging to reach certain demographics (say, those primarily wooed by traditional TV commercials), and threatens niche corners of the ad market that are being passed over by agencies that only see digital and dollar signs.
  • Global disconnect: Digital advertising growth is far stronger in the UK than in Europe (closer in comparison to tech-friendly parts of the United States). This is making it increasingly difficult to form marketing partnerships or to target European customers, when channel goals are so different.
  • First mover woes: When many agencies rush to the digital frontier all at once, a lot of mistakes get made. The UK market is seeing a lot of poor practices and relatively few best practices as a lot of first movers find out what doesn’t work.

A Mobile World

When looking at digital and Internet advertising in the UK, one clear trend is responsible for the most notable changes: Mobile consumption. While many sectors of the ad world, even TV and outdoor, are expected to grow, nothing can outpace the enormous rate of mobile purchasing and mobile ad spend. This is one of the biggest factors in pushing UK Internet advertising to a growth rate three times higher than the average global rate, with a market expected to grow by $64 billion in the next three years alone.

Automated Ads Are Big Business

Another rising trend in the market is automated ads, which accounted for around 59% of display advertising in the UK market. It’s a sign of the size and complexity of the market that programmatic advertising has become so widely adopted: Its efficiencies in the online world make digital advertising that much easier to organize and implement. Expect to see even more inclination toward programmatic advertising in the future as marketers continue to cut costs and speed up the process to get the best ad spots around the Internet.

Ad Blocking Concerns

Interestingly, the biggest threat to all this mobile and programmatic advertising is the consumer-facing ad blocker market, which is filled with tools to get rid viewable ads. There isn’t much the advertising market can do about the growing trend of ad blockers except aim to get on white lists and exceptions so their ads make it through. When ad blockers begin to hit mobile devices with the same speed they have arrived on desktops, we could finally see a contraction in the market. For now, however, the threat is looming but untested.

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