According to a new digital adspend report from the IAB UK and PwC, spend on smartphone video ads rose by £476 million in 2017, an increase of 69% on the previous year.
Total spend on what is being described as the fastest-growing online ad format has now reached £1.17 billion. Meanwhile, video spend overall – including phones, computers and tablets – was up 47% to £1.6bn.
Smartphones now account for 73% of all video spend and 45% of all digital adspend, compared to just 9% five years ago.
“People are spending more time online – specifically on smartphones,” said Tim Elkington, IAB’s chief digital officer.
“Digital has led to a change in consumer behaviour as people use their smartphone for a wider variety of things, be it listening to podcasts, learning a new skill or following stories on the likes of Snapchat and Instagram.
“The ad community has responded to this change – particularly the growth of mobile and video – by developing dynamic ad products that fit seamlessly into their environment.”
Tom Tryon, strategy manager at PwC added: “While this data relates to 2017, before some of the recent headlines that have been dominating the industry, it’s clear that there has been considerable momentum in the market.
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“What stands out to us is the number of success stories we’ve seen across a diverse range of formats, from audio to sponsored content, and across all parts of the industry value chain. More than half of the companies submitting to the study this year are in growth, which points to a robust and competitive marketplace.”
The findings also show that 83% of social media budgets now go to smartphones, and outstream video – an ad that autoplays in a large format whenever a user navigates to it within an article – increased by 94% to £900 million, overtaking pre/post-roll as the largest video format.
Commenting on this week’s findings, Fergus Hay, CEO of ad agency Leagas Delaney, told Mediatel that growth in digitally enabled ad formats isn’t surprising given the engagement and reach on the smaller screens of mobile.
“However, the real takeaway from these results – given today’s economic climate – is that we, as an industry, actually need to fight the urge to focus too much on channels,” he said.
“Our priority has to be on driving market share growth for clients with top tier creative ideas and, as we say, it’s only an idea if it changes a client’s business. Ultimately, success isn’t about spend in the market or across channels, it’s about growing our clients’ businesses.”
