UK Digital Ad Spending 2021

Strong Pandemic Gains Cement Digital’s Dominance

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About This Report
Digital advertising confounded the conditions of the past year or so and will attract more than three-quarters of total media ad spending in 2021—£19.23 billion ($24.66 billion). Video has been the biggest driver of digital spend during this time.
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Executive Summary

Traditional advertising suffered during the pandemic. Budgets that were destined for these channels were shifted over to digital options, instead. Fueled particularly by massive video gains, digital ad spending will account for more than three-quarters of total media spend in the UK this year.

How did the pandemic affect the UK ad market?

H1 2020 was a tough period for the whole ad industry. However, through H2, digital recovered well enough to post strong full-year gains. On the other side of the scale, though, traditional formats weighed less than ever. The end result was a market thoroughly dominated by digital, which accounted for 74.8% of total media spend.

What were the underlying drivers of these changes, and how will they pan out in 2021?

Some traditional formats—out-of-home (OOH), for example—will see a bounce back as pandemic restrictions ease, but none will see a return to pre-pandemic levels of spend anytime soon. Digital spending, meanwhile, was fueled in large part by video advertising. And with many digital consumer habits anticipated to stick post-pandemic, digital video is set to bolster its position as a key digital ad format for years to come.

How did shifts in spend by format affect the duopoly?

Digital display advertising, and particularly video, benefited from the pandemic. Search, on the other hand, struggled as some of the largest budget holders were forced to pull back spend (travel, for example). This has led to Facebook gaining some ground on Google in terms of the duopoly’s ad revenue share. This year, Google will account for 39.6% of total digital ad spend, and Facebook will account for 28.9%. In 2019, those proportions stood at 40.1% and 24.9%, respectively.

WHAT’S IN THIS REPORT? This report features our latest forecast for UK ad spending, including breakouts by media, format, and company. It also examines how the pandemic affected the ad market last year, and how new dynamics may play out in the future.

KEY STAT: Digital advertising’s better-than-solid showing during the height of the pandemic in 2020 means that this year’s total of £19.23 billion ($24.66 billion) in spend will be above our pre-pandemic forecast.

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authors

Bill Fisher

Contributors

Zach Goldner
Junior Forecasting Analyst
Karin von Abrams
Principal Analyst