IAB digital adspend report: Industry analysis

The growth of display advertising revenue has hit a landmark this year, with it now making up 33% of the entire digital adspend. This result is largely due to the growth and increasing dominance of programmatic media buying techniques, and the associated targeting capability of the channel.

Brands shouldn’t rest easy though, the challenge to effectively reach consumers and actively engage them is still clear. Concerns around environment, viewability and fraud are rife, and now we have the additional challenge of the looming spectre of an increase in usage of ad-blockers, especially amongst millennials and on mobile – with spammy advertising driving consumers to take action to avoid display advertising altogether.

In this light it’s not surprising to see a shift of budget towards both native advertising and content centric marketing. Spend is up 50% on last year, having reached £325 million and now accounting for a quarter of all display revenues.

This is crucial given the cultural shift of consumers away from more traditional online advertising and towards content that fits more seamlessly into their digital experience. This points to a future in online advertising where advertisers work more closely and in a more integrated fashion with publishers and content creators to create more innovative, relevant and culturally aligned solutions to cater to the tastes and passions of their audience.

In 2016 watch for the rise of the native DSP and native ad-networks that can offer this more integrated solution.

Amit Kotecha, Head of Marketing, EMEA, Quantcast

Digital ad spend is continuing to rise, and this is increasingly owed to brands trusting digital to be a driver for branding, rather than direct response alone.

The top three sectors increasing their share of digital ad spend are travel, FMCG and finance, which is also an encouraging sign as it indicates that the technology being used to deliver advertising is providing value back to these advertisers.

As consumers spend more time online (2hrs 51mins per day according to the latest IAB figures) we have seen a huge uptake within our client base when it comes to using digital display to drive brand awareness as well as performance.

As larger and more innovate formats become available alongside online video advertising – as well as the all-important ability to measure what matters, like viewability – there is a higher confidence in the ability of digital display to deliver.

What the ad spend figures make self-evident is, as there has been for a couple of years now, a two speed display ecosystem in terms of growth. The tech distribution platforms on one side, growing at enormous speed, and the content producers, on the other facing a much slower walk uphill.

For the latter, the ad spend figures remind us at Trinity Mirror that we need to aggressively invest in the growth areas of video, content marketing and performance solutions, especially in the form of in-stream native.

That remains the best hope of monetising all our burgeoning mobile traffic which now accounts for over 70% of our 25m monthly audience. Bigger, intrusive, tired and data hungry formats merely feed the ad blocking beast that we fear so much. We must look at what we can learn and copy, with the inevitable constraints, from those burgeoning tech platforms.

Matthew Landeman, executive client officer, Carat

Investment into digital marketing across the board continues to grow at a pace ahead of last year and at a significant multiple ahead of the economy at large.

As it stands the IAB is right to place this growth in context against the amount of current attention around ad-blocking technologies as it demonstrates an industry that continues to have strong momentum and that clients are confident investing in, delivering effective and directly measurable outcomes.

Mobile advertising passing the landmark £1bn shows that consumers are spending more time with good content than ever before and there is still room to grow. The fact is that even at this scale, the investment in mobile lags behind its level of usage as an internet platform so we would expect to see this trend continue and clients to further dedicate resources on getting their mobile propositions right.

It’s great to see digital growth being confirmed by these IAB numbers, we are seeing agencies and brands far more engaged with the need to personalise and communicate with people in a way that resonates and reflects their motivations.

To be relevant for consumers going forwards and avoid the easy temptation to block all ads, digital advertising has to transform further and faster. It has to move towards understanding the audience and provide a greater range of well targeted prospecting advertising rather than pursuing consumers with an increasing volume of advertisements about products and services the recipient is already familiar with.

We need to remember that advertising is all about the consumer and if they are blocking ads then we aren’t doing our job right.

Many within the industry will be reassured to see digital ad spend looking that healthy compared to the growth rate of the rest of the economy. The figures provide more evidence of advertisers chasing consumers’ wandering attention – whether that be to their mobile devices or their social networks

The challenge of ad blockers should be a reminder that just because more money is being spent, it doesn’t necessarily mean that the advertising is getting any more successful.

In fact, in the case of mobile, ads can negatively impact consumers’ experience to such an extent that they’ll actually change their behaviour just to avoid them.

It’s not just a case of throwing more money into the channels that people use most, but trying to create new formats that complement consumer behaviour. Ultimately, that’s what the industry should be worrying about.