Business Technology

Record £7.2bn UK digital ad spend as average British home has 7.4 internet devices

4 min read

09 April 2015

Former deputy editor

The average British household owns 7.4 internet-connected devices, which drove the digital advertising spend up by 14 per cent to hit a record £7.2bn in 2014, according to the Internet Advertising Bureau and PwC.

The growth in gadget usage has been witnessed as 37 per cent of UK homes bought a tablet over the last year, the study found, with 11 per cent owning three or more. Despite that, smartphones were the most common devices to be found in homes, followed by laptops and tablets.

Given this demand, advertisers have been keen to take their marketing campaigns digital, which resulted in the annual record £7.2bn spent in 2014, up from £6.26bn in 2013 – a £936m increase.

Of the digital ad spend, the spend on mobile rose by 63 per cent to £1.62bn last year, while the channel accounted for 23 per cent of all digital ads, which is up from 16 per cent in 2013. It comes as smartphones today now account for 78 per cent of handsets in the country.

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.”

Complementing Elkington’s comments, the online British adult is unwilling to pay much for access to digital content, given the abundance of free materials available. The data found Brits would pay a maximum of £1.53 a month for email, £1.33 for 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.

51 per cent of respondents said banking is the area that would be most affected without the internet or mobile phone, while 42 per cent said keeping up with current events, 38 per cent said shopping and 37 per cent said relationships with friends and family.

An example of how the face of banking has changed forever was demonstrated by Barclays in late February, when it revealed it’s the first British bank to allow transactions for businesses and consumers via Twitter.

The consumer goods sector spent the most on display ads with a 19 per cent share, followed by travel and transport on 14 per cent. Consumer goods also spent the most on mobile display ads with a 19 per cent share, while entertainment and media was close behind with 18 per cent.

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Meanwhile, the social media ad spend rose by 65 per cent to hit £922m, with 56 per cent of the campaigns pushed across mobile at a £517m spend. Elsewhere, content and native ads achieved a £509m spend – the result follows an IAB plan that insists advertisers and brands make it easier on consumers to determine the difference between content and promotional content.

Additionally, video advertising grew 43 per cent year-on-year to £442m – a large surge from £53m five years earlier.

“Despite digital’s continued stellar performance, there remains significant growth opportunities to be exploited on mobile and tablet devices,” says Dan Bunyan, senior manager at PwC. “These are the two areas where ownership and usage is extremely high but where advertising investment is disproportionately low. For instance, over half of web pages are viewed via mobile phones but they account for just 23 per cent of digital spend.”

Image via Shutterstock.