Digital ad spend reaches record highs, surpassing £5 billion mark in 2012

A new report from the Internet Advertising Bureau (IAB) has revealed the exponential – and record – growth of digital advertising, with mobile accounting for 10% of all digital revenue last year.

In 2012, digital ad revenue reached an annual high of £5.42 billion, up 12.5% (£607 million) year on year. Of this, mobile advertising was responsible for approximately £526 million, a like-for-like growth of 148%.

In just three years, mobile has increased from 1.1% to 9.7% of all digital ad revenue, fuelled by record smartphone ownership – now penetrating almost two thirds of the UK population.

Since 2011, mobile video advertising has grown by an incredible 1,601% to £13 million, even without a 4G prevalent network – which was rolled out by EE last year and will be offered by a number of other operators this spring.

“Mobile has reached this milestone because marketers are becoming more attuned to the ‘always on’ nature of consumers who expect to engage with content wherever they are,” said Tim Elkington, Director of Research and Strategy at the Internet Advertising Bureau.

“Consequently, advertisers are increasingly buying integrated campaigns across online and mobile rather than regarding mobile as an afterthought,” he said.

Video and social media advertising has also undergone a huge shift in marketing value over the last three years.

Since 2009, video ad revenue has increased by almost six times the original figure (471%), now responsible for 12% of all online and mobile display – a £160 million revenue.

Social media has seen a similarly impressive growth, with advertising increasing from £265 million to £328.4 million in 2012. In three years, social media revenue has almost quadrupled (383%).

Online and mobile sponsorship advertising grew by 34% over the year with a three-year period growth of 128%, now responsible for 5% of all digital display.

Online in-game ad revenue climbed 30% to £23.4 million.

Anna Bartz, Senior Manager at PwC, said: “The advertising market is shifting toward storytelling and integrated campaigns which give greater prominence to video and display formats with a higher degree of interactivity with the target audience.

“Over the past two years, the digital advertising revenue model has also changed from an emphasis on direct response to being more about branding and awareness.”

The report revealed that the top five display advertising sectors in 2012 are were finance (15%), entertainment and media (13%), retail (12%) and technology (9%).