Updated Oct 2022: How Digital Spend Impacts the UK Ad Market

October 19, 2022

Across the board, agencies are spending much more on digital advertising throughout the UK. This should come as no surprise – this trend has been notable for almost a decade, and Britain continues to embrace digital advertising with particular fervor. In 2021, digital advertising spending in the UK amounted to 23.47 billion British pounds, up from 15.08 billion in 2020.

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 target European customers when channel goals are so different.
  • Moving too quickly: 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 movers find out what doesn’t work.

UK trend #1: Short-form is first and foremost

Short-form video social platforms like TikTok have over 1 billion monthly active users for you to market your product or services. Plus, it costs next to nothing, so vertical video is a must for UK digital marketing going into 2023. Along with it being an affordable and accessible way to market, it also has the highest ROI of any social media marketing strategy by 30%. Meta recently announced during its Q1 2022 earnings call that Reels now make up over 20% of the time users spend on Instagram.

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.

UK trend #2: Automated ads continue

Another rising trend in the market is automated ads, which account 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. Marketers will continue to cut costs and speed up the process to get the best ad spots around the Internet.

UK trend #3: Cookie-less marketing is coming

Perhaps the most significant and widely publicized trend is how marketers are going to operate once Google removes third-party cookies in 2023. For decades, cookies have been at the forefront of advertising technology. Yet, the ‘cookie-pocolypse’ is a revolution that will bring about real marketing challenges. Without third-party cookies, ads become far less targeted and personalized. The onus falls on great marketing that offers proper value to your audience and first-party data.

First-party data is the information your company collects directly from its customers. It is owned by you and is a treasure trove of data. Used correctly, it can help continue to deliver personalized and targeted marketing. What’s more, there are zero costs involved in the data you already own. But, the main challenge is working out how to collate, segment, and activate it in a centralized way. It will typically be held in different areas of your business.

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