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18/04/2017

Propeller clients comment on the latest UK Digital Ad Spend Report

The UK digital market grew 17.3% in 2016 according to the latest UK Digital Ad Spend Report released by The IAB UK and PwC. Mobile has been the largest driver of this growth with a 50.8% increase year-on-year, accounting for an astounding 99% of all digital growth.

Many of Propeller’s clients were able to comment on the positive results for the UK ad industry and we’ve collated their expertise below:

“The IAB’s full year ad spend results from 2016 show the fastest growth in digital advertising since 2007, which is hugely encouraging to see. Display saw such a bumper year – with video in particular seeing a 56% increase in spend. We are also at an all time high of programmatically traded ads (with 72% of display ads now being traded programmatically) which means the onus is on us as an industry to make sure that these ads are relevant and that we’re measuring ad effectiveness in line with the brand’s business objectives rather than just focusing on delivering back clicks and views. This kind of refocusing will go a long way to solving the issues we’re currently experiencing with fraud and brand safety, as our obsession with last-click is driving brands and tech partners to see value in all the wrong places”

Ben Murphy, Managing Director UK, Quantcast

“The ongoing growth and health of the digital market is great to see; but a smaller trend within this is one that will really help business growth. This is that nearly three-quarters of display is now traded programmatically, which affords smaller agencies and digital media firms the ability to operate in a more stable financial situation, as programmatic deals tend to have shorter and more predictable payment terms. This makes it easier for business owners to plan for and accommodate growth, giving them the confidence and ability to invest in bigger teams and aim for more ambitious projects. Additionally, for publishers and vendors downstream of agencies, programmatic revenues are best suited to lending products that are built on top of the ad-tech platforms.”

Matt Byrne, UK Director, FastPay

“The increase in mobile ad spend, which now accounts for 38% of all digital spend, shows that brands are reflecting their consumers’ behaviour. Seventy-seven percent of consumers watch TV with a device for browsing the internet nearby, providing an opportunity for brands and advertisers to capitalise on, especially with the 15% growth in paid search. Advertisers could further take advantage of this by controlling their search advertising in the moments that matter to consumers. Advertisers should now create a search and social strategy that allows them to modify spend for generic keywords whenever relevant TV content occurs.”

Tom Smith, Head of Search, mporium

“In the early part of 2017, we have seen increasing pressure on the industry to meet the needs of advertisers by offering protection from ad fraud, viewability and brand safety, while also providing complete transparency. As a result of this, those who fail to adapt may well see spend being pulled. Advertisers need to make sure they are facing these industry issues head on, demanding more from the supply chain and making sure that they are working with reputable partners that can offer complete transparency, minimising the risk of ad fraud and brand safety issues.”

Gavin Stirrat, Managing Director, Voluum

“With paid search now accounting for nearly half (48%) of all digital ad spend, it is clear that brands are seeing the increased value of this investment. With the ongoing challenge of attributing quantifiable return on traditional display advertising, paid search continues to offer a solution for brands to gain tangible, yet scalable, ROI. The channel has started venturing into more complex audience-based strategies, whilst becoming more and more focused on structured data, and will no doubt continue to evolve to keep up with technology that consumers gravitate towards in the future.”

Wajid Ali,  Head of Paid Search, Forward 3D

The results overall are really encouraging as marketing budgets continue to grow and adspend is forecast to increase. It might seem counterintuitive that marketing budgets are set to grow against a backdrop of uncertainty, but this is a sign that boardrooms are starting to properly value marketing as an engine of growth rather than a cost on the balance sheet - a welcome sign of the times as chief marketing officers become chief growth officers.

It’s also encouraging to see main media has had its best result in 3 years, as marketers direct their increased budget towards these channels. This, coupled with the fact that we don’t expect digital adspend to decrease anytime soon, is encouraging from a performance perspective as a cross channel approach is the most effective way for brands to maintain long term growth.

The increase in spend in main media can also can be attributed to a heightened awareness of ad placement, a consequence of a slew of negative headlines. With brand safety high on the agenda, we could see a return to more direct buying and a renewed focus on the content brands are being associated with.

Mark Jackson, managing director, MC&C

Read the full articles on ExchangeWire here and Mediatel here.

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