Dissecting 2017’s full year IAB UK Adspend results

So, the headline news at the IAB yesterday was that the UK’s digital advertising market is up 14.3% YOY and was worth a staggering £11.55bn last year. The numbers have finally been crunched and there’s some interesting nuggets in the report which we, along with all the key players from publishing groups and adtech companies, submit to twice a year. The key takeaways are:

• Smartphones are driving the bulk of the growth – an increase of 37% YOY
• 45% of all digital advertising is delivered on smartphones
• Online video is now the largest display format – accounting for 39%

Separating native and sponsored content

From a native perspective, one of the interesting changes to themethodology is separating sponsored content from native. As native advertising becomes a catch-all, encompassing click-out formats and promoted social media posts, it’s become important to work out exactly what is stay on site brand content and what may have simply shifted from traditional display budgets. For the record, Native (which includes Facebook and Twitter) is now worth over £1 billion, with sponsored content making up £124 million.

Video formats shift

Pre-post roll has lost its crown as the largest video format, having been overtaken by outstream in 2017. With budgets shifting from television to online, this could be because of limited pre-roll availability and the need to find audiences online at scale.

The growth of the private market place (PMP)

With 4/5 of display budgets being traded programmatically, it’s clear that programmatic has been a huge success. What’s more interesting is the shift to programmatic direct – up 10% YOY and now making up 63% of trading. Mary Healy from Accenture is Chair of IAB UK’s Display & Data Steering Group. She said:

”Programmatic direct and PMPs will continue to take the lion’s share of the spend as brands realise that context is just as important as it is in other media. 2017 certainly highlighted a number of concerns across the digital media ecosystem, which has forced the industry to re- evaluate many of the practices we had followed in the past”

With GDPR looming, it could be that these deals – essentaillty selling named inventory rather than just finding the audience regardless of the environment, will grow further during 2018. A lack of reliable data combined with brand safety fears could well mean that buyers are increasingly looking for high quality, contextually relevant publisher environments rather than open RTB.

Digital is the big winner

Finally, gazing into the crystal ball, GroupM predict that digital will outperform the UK ad market again in 2018 – a 10% increase versus 4.8% generally. One thing is clear – as we continue to look downwards on our smartphones, spend on digital continues to head upwards.