Mobile investments to rise by 90% in 2013
Mobile advertising in the UK is expected to touch almost £1 billion ($1.6 billion) in 2013, up 90% from £526 million spent last year ($834.9 million), according to updated figures on advertising spending from eMarketer.
Mobile ad spending will help drive digital ad growth throughout the forecast period. The UK has a solid mobile internet audience and strong smartphone and tablet adoption rates. Advertisers are investing in mobile search and display formats to engage the UK’s increasingly multiscreen user base.
Despite continued economic struggles in the UK, digital ad investments are growing robustly. Digital ad spending, which includes online and mobile formats, will rise 12% between 2012 and 2013 to reach £6.1 billion ($9.7 billion) this year. eMarketer expects expenditures on digital advertising to surpass £7 billion ($11.1 billion) by 2015 and £8 billion ($12.7 billion) by 2017.
eMarketer’s June 2013 forecast represents an upward revision to this year’s expected mobile and digital ad spending totals, based on data pointing to healthy growth in Q1. Total media spending projections have also been raised due to the faster-than-expected growth in digital.
Search will account for more than half of all investments in online and mobile advertising through 2016. Advertisers are taking particular advantage of the opportunities mobile search offers. Display ad spending will total one-fourth of digital ad expenditures in 2013, but its share is growing rapidly thanks to massive increases in video advertising.
Video’s share of digital ad spending will grow dramatically as marketers develop more advertising content for the expanding UK digital video audience. eMarketer projects that the number of internet users who watch video content online or on mobile at least once per month will rise from 34.4 million to 40 million between 2013 and 2017. During that same time period, video will increase from 4% to 12.4% of the UK’s digital ad market and more than triple in ad dollars by 2016.
The strength of the digital ad market is reflected in the amount advertisers are investing to reach individual UK residents on online and mobile platforms. In 2013, on average, £127 ($202) will be spent on digital advertising for each UK internet user. This is more than four times the worldwide average and higher than the amount spent by advertisers in the US.
Total media ad spending is forecast to reach £13.98 billion ($22.19 billion) this year, up 3.7% from last year. The UK economy is still ailing after a dismal last few years, and this has hindered potential growth of the ad market. But the advertising sector is stronger than other industries in the UK, boosted by substantial gains in online and mobile ad investments. The digital ad industry is the largest single component of total media spending, surpassing even TV.
Despite continued uncertainty about the European economy, advertising investments saw a slight bump in growth in 2012 due to the London Summer Olympics and the UEFA European football championships. Similar increases are expected in 2014 for the World Cup and Winter Olympics when total media ad expenditures are projected to reach £14.67 billion ($23.29 billion). eMarketer forecasts that this year’s growth rate will match last year’s rate of increase and will spike to 5% next year.
eMarketer bases its estimates of digital and total media ad spending in the UK on the analysis of various elements related to the ad spending market, including macro-level economic conditions; historical trends of the advertising market; historical trends of each medium in relation to other media; reported revenues from major ad publishers; estimates from other research firms; consumer media consumption trends; and eMarketer interviews with executives at ad agencies, brands, media publishers and other industry leaders.
In this case, eMarketer evaluated more than 350 data points collected from dozens of research sources—including company results, industry associations, investment banks, media buying companies and other organizations that track advertising spending trends, as well as figures on trends related to advertising growth, such as ad impressions, smartphone usage, internet usage and other figures—before building its bottom-up models for ad spending among major companies, digital ad formats and spending across media channels.
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