IAB UK: digital adspend up 56% on pre-pandemic levels

IAB UK: digital adspend up 56% on pre-pandemic levels

The IAB UK’s Digital Adspend 2022 report found the UK digital ad market grew by 11% in 2022.

The trade body highlighted the growth occurred despite the cost-of-living crisis, political uncertainty, and structural changes such as the removal of Apple’s Identifier for Advertisers (IDFA) which helped track users for targeting.

The report, produced with PwC, revealed UK digital adspend in 2022 stood at £26.1bn, marking a 56% increase since the beginning of the pandemic in 2020.

Spend on search rose 13% year-on-year to reach £13.1bn, while display investment grew 6% year-on-year to £10.4bn.

The IAB UK report noted growth in display was fuelled by standard display ads, which saw 14% year-on-year growth.

Video spend also grew by 9%, driven mostly by investment in outstream formats.

The IAB UK Digital Adspend 2022 report revealed the size of the UK’s digital retail media market for the first time, sizing it at £176.4bn.

The trade body said the inclusion of the figure represented the “growing diversity within the online ecosystem.” It forecast that spend in this area would continue to rise in 2023, with digital retail media set to become an important driver of digital’s overall market growth as advertisers look to leverage retailers’ first-party data.

Another important takeaway was that the rate of growth in desktop spend (+ 14%) surpassed mobile (+ 8%) for the first time since records began.

As the report noted, this coincides with Apple’s IDFA changes. Despite this, mobile still controls the lion’s share of the market at 58%.

Advertiser spend on podcasts was also included in the report, increasing by 32% to £76.3m. This is three times larger than when IAB UK first started measuring podcast investment in 2020. Wearable devices and in-car advertising also saw strong growth in advertiser investment in 2022.

Jon Mew, CEO at IAB UK, said: “Today’s results also reflect the growing opportunities for advertisers to resonate with audiences in new ways.

“Of course, search and display spend still underpin the digital ecosystem, but the UK’s flourishing retail media market officially sized for the first time in this report — alongside the continued growth of podcasting, show how digital is diversifying to offer advertisers more choice and more immersive routes to connect with consumers.”

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