The UK’s digital ad market grew 5% year-on-year to £13.8bn in the first six months of 2023.
That is according to the latest figures from Internet Advertising Bureau (IAB) UK and PwC, which found spend on display video ads, which includes on YouTube, social media, and publishers’ websites, saw the strongest growth through the first half of the year among digital subcategories (11%).
Overall spend on display formats (including both video and non-video) grew by 8% in comparison.
The worst-performing digital category remained classified ads, which declined 13%.
Notably, spend on mobile ads grew by 9% whereas non-mobile formats remained flat. The results imply a significant prominence of mobile video, and in particular short-form video content, which has grown in popularity since the pandemic. Ofcom’s Media Nations report in August found that over a third of UK adults watch short-form videos daily, rising to two-thirds (68%) for the 15-24-year-old demographic.
Search ads, however, still attracted the most investment of any digital category, encompassing half (50%) of all spend and growing 5% year-on-year to £7bn.
“The results we’ve released today reflect two things,” said IAB UK CEO Jon Mew. “That the digital ad market isn’t immune to wider economic pressures, but also that it’s repeatedly resilient in the face of challenging circumstances.”
The growth in digital investment has indeed come amid broader inflationary pressures and concerns of a volatile and recessionary macroeconomic environment in the UK. While digital adspend has continued to grow in the first half of 2022, it is doing so at a slower rate than the previous year, when it grew 11%.
“Over the years, we have become used to seeing extremely strong growth and there is no getting away from the fact that spend has slowed so far this year,” continued Mew. “And yet the industry is still growing despite the UK’s soaring inflation, the threat of recession, and the impact of structural changes such as the removal of IDFA (e.g., Apple’s identifier for advertisers).
“It’s particularly encouraging that video formats are seeing strong investment. Advertisers are increasingly harnessing the creative power of digital channels to bring campaigns to life and deliver long-term results, and we see this reflected in robust video investment.”
