More than seven devices per household

Digital Britain attracts record advertising

digital economyThe average British household now owns 7.4 internet devices which is driving up spending on digital advertising to a new record, according to the latest research.

Almost four in every ten (37%) of homes acquired a tablet in the past year, a key factor in persuading advertisers to target the digital market. It rose by 14% to £7.2 billion last year from £6.26bn in 2013 and is enabling users to access services for free.

Banking and finance is named as the area of people’s lives most affected when the internet is not available

The figures from the Internet Advertising Bureau UK Digital Adspend report, conducted by PwC and accompanied by YouGov consumer data show that smartphones remain the most common internet-enabled device with 1.7 per household.

This is followed by laptops (1.3) and tablets (1.2). Four in 10 (40%) households now own one tablet, one fifth (19%) have two, while 11% own three or more. According to the IAB/PwC data, tablet-dedicated ad spend alone grew 118% to reach £87.4 million.

With smartphones accounting for nearly eight in 10 (78%) handsets, mobile advertising grew 63% to £1.62bn in 2014. Mobile technology now accounts for almost a quarter (23%) of all digital advertising spend – up from 16% in 2013.

Tim Elkington, Chief Strategy Officer at the UK’s Internet Advertising Bureau, said: “Advertisers are increasing their digital budgets to reach people as they go online through an increasing array of devices.

“It’s a win-win for consumers, because digital advertising pays for the wide range of free online services they increasingly rely on in their daily lives, but don’t necessarily want to pay much for.”

Banking/finance is the area of people’s lives that would be most affected without the internet or mobile phone – cited by over half (51%) of adult Britons online – followed by keeping up with current events (42%), shopping (38%) and their relationships with friends and family (37%).

Colin Slater, digital partner at PwC in Scotland said: “Over the last 12 months, we’ve seen digital across Scotland and the UK deliver a stellar performance.

“Nevertheless, there are still significant growth opportunities to be exploited on mobile and tablet devices, where ownership and usage is extremely high  yet conversely advertising investment is disproportionately low. For instance, over half of web pages are viewed via mobile phones but they account for just 23% of digital spend.”

How much will people pay?  – The YouGov study reveals the average British adult online is willing to pay a maximum of £1.53 a month for their email service, £1.33 to use search engines, £1.10 for video content, 92p for news websites, 88p for social media, 55p for online games and 52p for price comparison sites.

Consumer goods biggest display advertisers – The biggest spending sector on display ads in 2014 was consumer goods, which had a 19% share, followed by travel & transport (14%) and finance (13%). Consumer goods were also the biggest spender on mobile display ads – accounting for a 19% share, followed by entertainment & media (18%) and retail (14%).

Digital advertising formats – Boosted by video and social media, display advertising across the internet and mobile grew almost twice the overall digital rate (14.0%) at 26.4% to £2.27bn in 2014. Display now accounts for 32% of digital ad spend – its largest ever share.

Social media ad spend grew 65% to £922m, with 56% (£517m) accounted for by mobile.
Content and native advertising spend hit £509m – 22% of digital display advertising
Video advertising grew 43% year-on-year to £442m in 2014compared to just £53m five years ago. Mobile video advertising, alone, grew 142% year-on-year to £164m.
Paid-for search marketing increased 8.7% to £3.77bn in 2014.
Classifieds including recruitment, property and automotive listings, grew 11.6% to £1.05bn – accounting for 15% of digital ad spend.

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