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UK ad spending rose 3.7% in 2016 to £21.37 billion ($28.84 billion), with digital advertising largely responsible for the increase, according to data from the Advertising Association (AA) – UK and Warc. Several traditional media saw nondigital ad outlays dip.
The UK’s seventh consecutive year of ad investment growth was powered by a 13.4% increase in digital ad spending to £10.30 billion ($13.90 billion). Mobile advertising was responsible for 99% of that growth, according to the AA and Warc, on the strength of a 45.4% increase in spending to nearly £3.87 billion ($5.22 billion).
Digital’s total was nearly twice that of the UK’s second-largest advertising channel, TV, for which spending eked out a 0.2% increase last year to just under £5.28 billion ($7.13 billion). Digital was also what kept TV ad spending from falling into the red: Minus a £197 million ($265.9 million) contribution from video-on-demand (VOD) advertising, linear TV ad investment dipped by 0.5% for the year.
Likewise, digital accounted for 38% of the nearly £1.1 billion ($1.48 billion) in out-of-home (OOH) ad spend tallied in 2016, according to the AA and Warc, while a 35% increase in digital spending helped radio advertising rise 5.4% to £646 million ($871.9 million).
Print media weren’t so lucky. National newspapers still saw a 10% drop in ad outlays, even with a 4.9% increase in digital ad spending. Similarly, a 0.2% gain in digital ad spend wasn’t nearly enough to offset slowing magazine ad sales, which fell 6.8% overall for the year.
Digital’s only negative performance was a 3.4% slip in ad sales for regional newspapers, which contributed to the sector’s 13.2% drop in overall ad expenditures to £1.02 billion ($1.38 billion).
“The UK’s ad industry is experiencing the most seismic shift since Warc monitoring began in 1982,” said James McDonald, senior data analyst at Warc. “Last year exemplified this as over 95% of the new money entering the market came from digital formats. The trend will continue as ad tech improves and consumers spend more time with their internet-connected devices.”
AA and Warc forecasts for the next two years anticipate overall UK ad spending growth of 2.5% in 2017 and 3.3% in 2018.
eMarketer’s latest forecast of UK total media ad spending predicts even faster growth, with increases of 5.5% and 5.3%, respectively, in 2017 and 2018—driven likewise by gains in digital ad spending.
As programmatic advertising matures, buyers and sellers no longer see it merely as a means of automating processes, but rather as an advanced method of controlling ad campaigns—and better targeting the audiences that come with them.
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