Digital ads won’t be immune to spend cuts, IAB warns

Digital advertising will not be “immune” from tightening marketing budgets, IAB’s UK chief has warned after the market surged by 15% in the first half of 2022.

UK digital adspend grew to reach £12.52bn in the first six months of 2022, mostly driven by search. This comes after the digital ad market was rocked by the Covid-19 pandemic, with spend dropping by 5% year-on-year in H1 2020, which was followed by a bumper year for spend in 2021 with 55% growth in H1.

The 15% growth in H1 2022 is more in line with pre-pandemic levels, with the same growth figure recorded in 2018 and 2019, the IAB’s report said.

Jon Mew, CEO of IAB UK, described this level of growth as “strong but more sustainable”.

But for the rest of 2022 and next year, he added: “We have Christmas and the World Cup coming up, which will likely see spend peak in 2022, but digital advertising won’t be immune to tightening budgets as the cost-of-living crisis takes hold. Continuing to invest in marketing throughout challenging times is well documented, and digital has the benefit of offering advertisers a powerful combination of proven results and flexibility.”

In H1 2022, IAB UK figures found spend on search made up more than half of the digital ad market total (53%), marking an increase of 16% year-on-year. Investment in display, video display and non-video also grew by 8%, 6% and 10% respectively year-on-year.

Mobile ads made up 57% of spend from a device perspective, while spend on non-mobile ads grew 38% compared to the same period the year before. Classified ads also grew 42% year-on-year.

The IAB UK’s Digital Adspend update is produced with PwC every six months.