UK digital adspend inches ahead in 2023, video ads up but search still rules

The UK’s digital ad market attracted £13.8 billion of spend in the first six months of 2023, according to IAB UK and PwC’s half-year Digital Adspend update. The data shows digital advertising rose 5% year-on-year in a volatile economy fuelled by high inflation.

Spend on video ads saw the strongest growth, up 11%. Ofcom’s recent Media Nations report showed that over a third of UK adults watch short-form online videos daily, rising to 68% of 15-24 year olds. Overall, spend on display formats (including both video and non-video) grew by 8% year-on-year.

Search ads though remain the biggest sector with 50% of the total market, which will make Google happy. The category grew 5%, attracting nearly £7 billion across the first six months of 2023.

Classified ads were the only format to see spend decline with a fall of 13%, although this is markedly less sharp than the 21% fall seen in H1 2022. By device, spend on mobile ads grew by 9% with non-mobile formats remaining flat.

IAB UK CEO Jon Mew says: “The results we’ve released today reflect two things – that the digital ad market isn’t immune to wider economic pressures, but also that it’s repeatedly resilient in the face of challenging circumstances. Over the years, we have become used to seeing extremely strong growth and there is no getting away from the fact that spend has slowed so far this year. And yet the industry is still growing despite the UK’s soaring inflation, the threat of recession, and the impact of structural changes.

“It’s particularly encouraging that video formats are seeing strong investment. Advertisers are increasingly harnessing the creative power of digital channels to bring campaigns to life and deliver long-term results, and we see this reflected in robust video investment. As we head into the final months of 2023 and the lead up to Christmas, advertisers should be doubling down on a digital-first approach to make an impact, drive results and resonate with consumers where they’re choosing to spend their time.”

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