Advanced Television

Brits’ appetite for online video drives record digital ad-spend

October 8, 2014

Britons’ increasing appetite for watching video clips, TV and films on different devices helped drive advertisers to spend a record £3.5 billion (€4.4bn) on digital advertising in the first half of 2014 – according to the latest Internet Advertising Bureau UK Digital Adspend report, conducted byPwC, accompanied by online YouGov data.

Among Britons online who own an internet-enabled device, 73 per cent have watched TV programmes online in the last six months, 72 per cent have watched short online video clips and 59 per cent have watched films online. Britons watching TV online average 2 hours 35 minutes¹ a week doing so, compared to 1 hour 50 minutes for online film viewers and 51 minutes for those watching video clips.

Consequently, IAB/PwC data shows video advertising on the internet and mobile phones grew 59 per cent year-on-year to £202 million in the first half of 2014. Mobile video advertising, alone, grew 196 per cent to £63.9 million and is now the fastest growing digital ad format.

Device owners in Scotland are the most likely to watch TV (78 per cent), films (66 per cent) and video clips (82 per cent) online. Those in the East of England are the least likely to watch TV (69 per cent) and video clips (63 per cent) online. Those in Wales are the least likely to watch films online (54 per cent).

However, among online TV and film viewers, people in London average the most time online watching TV (3 hours 6 minutes¹) and films (2 hrs 27 mins) each week. Among video clip viewers, people in the south average the most time (1 hr 2 mins).

“A third of online viewers, particularly 35-44 year olds, are watching more TV, films and clips online than a year ago. Consequently, video now accounts for £1 in every £5 spent on internet and mobile display ads,” says Tim Elkington, Chief Strategy Officer at the UK’s Internet Advertising Bureau. “Average weekly viewing online amounts to 25 videos, 4-5 TV episodes and one film but what’s most interesting is that watching video on connected devices is becoming an increasingly social activity, like traditional TV. Half of people watching TV, films or video clips online do so with family members and three in ten watch with friends.”

Digital advertising hits six-month record £3.5bn

Advertising on the Internet and mobile phones overall increased, like-for-like, by 16.6 per cent or £467 million to £3.46 billion in the first half of 2014 – up from £3.0 billion in the first half of 2013.
Among media owners who submitted revenue figures to the IAB/PwC, tablet-dedicated advertising grew 160 per cent to reach £29.0 million; up from £10.5 million.

Mobile ad spend accounts for one-fifth of digital advertising

With smartphones accounting for over three quarters (76 per cent) of handsets, mobile advertising grew 68 per cent from £429.2 million to £707.1 million in the first half of 2014. Mobile now accounts for 20 per cent of all digital advertising spend – up from 14 per cent in the first half of 2013.

Consumer goods and entertainment dominate mobile display advertising

Consumer goods advertisers spent the most on digital display advertising, overall, accounting for 16 per cent share in the first half of 2014, followed by travel & transport (15 per cent) and finance advertisers (13 per cent). Consumer goods was also the biggest spender on mobile display ads – accounting for 23 per cent share followed by entertainment & media (21 per cent) and technology (12 per cent) advertisers.

“Mobile’s share of the digital ad pie has tripled in two years, accounting for a fifth of total spend – rising to nearly a third of display and over half of social media ads,” says Dan Bunyan, Manager at PwC. “As 4G becomes more prevalent and phone screens become larger, it will play an even bigger role in driving digital ad spend – particularly video.”

Digital advertising formats

Boosted by video and social media, display advertising across the internet and mobile grew almost twice the overall digital rate (16.6 per cent) at 30.1 per cent to £1.02 billion in the first half of 2014.

Social media ad spend grew 73 per cent to £396.0 million, with 53 per cent (£209.7 million) allocated to mobile.

Content and “native” advertising spend hit £216 million – 21 per cent of digital display advertising.

Paid-for search marketing increased 11.3 per cent to £1.92 billion in the first half of 2014.

Classifieds including recruitment, property and automotive listings, grew 14.4 per cent to £493.5 million – accounting for 14 per cent of digital ad spend.

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