Making Science

Digital ad spend up 49 per cent year-on-year in H1 2021, mobile accounts for 64 per cent

David Murphy

Digital ad spend saw huge year-on-year growth in the first half of 2021, according to IAB UK’s H1 ad spend update, released today. The data, produced with PwC, shows a half yearly spend of £10.5bn, which is up 49 per cent vs H1 2020 and 42 per cent vs H1 2019 – the last comparable period that did not include lockdown measures.

This growth – the largest ever since the IAB started recording spend bi-annually – came as businesses and advertisers found themselves better prepared for the third national lockdown, introduced in January 2021. With the eCommerce market flourishing, production logistics back on track and a roadmap out of lockdown in place, including the roll out of the UK’s vaccine programme, digital ad spend saw record rates of recovery in H1 2021. Meanwhile, consumer confidence continued to grow as people of all ages adapted to a digital-led lifestyle. According to UKOM-endorsed data from Ipsos, the online population in the UK has increased 6 per cent since the start of the pandemic – with the over-75s providing the biggest increase at 43 per cent.

The IAB’s update shows that search remains the single biggest digital channel – up 49 per cent year-on-year at £5.5bn – while the display market has also grown considerably, by 55 per cent. One prominent performer within display was video, which rose 70 per cent year-on-year to £2.3bn – an increase of 79 per cent compared to 2019.

Elsewhere, in a period when we were anything but mobile, there was a 75 per cent year-on-year increase in mobile ad spend, giving the channel a 64 per cent share of all digital investment and indicating its power as an outlet for media consumption, whether at home or on the move.

Overall, the IAB believes digital advertising’s growth is indicative of a wider confidence in the advertising market. The most recent IPA Bellwether report for Q2 2021 showed the strongest upward revisions of marketing budgets since Q1 2019, with overall ad spend forecasts from AA/WARC also upwardly revised since the start of the year.

“The pandemic forced businesses to either accelerate or improve their eCommerce offering to cater to a nation of housebound consumers – we saw three years of change take place in just three months,” said IAB UK CEO, Jon Mew. “Advertisers in turn adopted a more digital-heavy strategy as it was the medium least impacted by lockdowns. Meanwhile, the surge in video spend runs parallel to an explosion in short-form video content and a move from advertisers to harness this as a vehicle for effective brand-building.”

Stephanie Claxton, Senior Manager at PwC, said the results of the first six months of digital ad spend are really encouraging. “Not only have we seen the growth we expected on 2020, but also 42 per cent growth on 2019,” she said. “This is testament to the breadth of offerings available to advertisers in digital and the critical roles they play."