2017 proved to be another record-breaking year for UK online digital adspend, with total investment reaching £11.55bn.
At a first glance at the stats, nothing notable appears to be behind the growth in digital adspend: Display and Search spend has increased year-on-year by 18% and 16%, respectively; Search continues to account for 50% of digital spend. However a deeper look into the report shows some changes which advertisers should be aware of.
Smartphone accounts for most of the 2017 growth
Smartphone investment increased to £5.2bn – an increase of £1.41bn year-on-year which is huge when taking into account the total increase in adspend for digital overall was £1.44bn. Investment is rightly following where consumer time is spent, with the opportunities for advertisers to engage increasing. Video and social are two platforms where smartphone share of investment is higher than the average (45%).
From an agency perspective, we have seen a real shift in our clients willing to embrace not only the use of video but creating bespoke content for smartphones. Whilst TV executions are still often part of the creative mix, clients are open to incorporating shorter length videos to capture attention as they move away from just thinking of video creative as 30 seconds.
80% of Display spend is traded programmatically
Programmatic share of Display increased from 72% to 80% year-on-year suggesting that advertiser concerns over the quality of inventory has not yet impacted on investment.
2017 was the year of the digital supply-chain being described as “murky at best, and fraudulent at worst”. However total investment in the UK still increased which is testament to the industry coming together to tackle this head-on. Whilst far from perfect, concerns over transparency are being openly discussed with both advertisers and agencies asking the right questions to suppliers ensuring that confidence is restored and built once again.
One in every five pounds of digital adspend is spent on social
Facebook is likely to be taking the lion’s share and we can only see this increasing during 2018 (even with the recent fallout) for a number of reasons, including:-
- The algorithm changes (again!) are meaning that advertisers are having to increase investment further to ensure their content is being seen.
- Facebook’s move to work with more third-party verification partners over the course of 2017 is slowly (very slowly!) providing advertisers with more information on what is happening behind the walled garden.
- The recent introduction of Instagram shopping is also likely to be increasing advertiser attention and budget on the app. Although the photo tagging is for organic posts, driving a subtle change in people behaviour on the platform may have a significant impact on paid advertising too as people become comfortable with being driven away from Instagram.
What does 2018 have in store?
Advertiser adoption of digital has continued to grow at the start of this year and with GDPR expected to place limitations on a number of traditional channels, advertisers are likely to increase investment further across Paid channels for both acquisition and retention. Advertisers will need to work harder to acquire new customers and retain attention from their existing customers – with the latter group previously potentially being taken for granted.
Sharan Cheema, Client Services Director
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