Adspend

Our accountant, Eriona, reviews the 2017 IAB Adspend results

Our accountant, Eriona, reviews the 2017 IAB Adspend results

Money can’t buy happiness, but it sure can buy a lot of advertising. Last year, the UK's digital Adspend was estimated to be a whopping £11.55 billion. But what does this mean for Coull and the rest of the advertising industry?

Eriona, Coull accountant, reviews IAB Adspend

Eriona, Management Accountant at Coull

Our new Management Accountant, Eriona, is here to give you the low-down on the IAB’s 2017 Adspend figures and what they mean for this following year.

Plants growing

[source: giphy]

The industry is thriving

It’s clear to see that the UK digital advertising market has healthy growth, there’s year-on-year growth of 14.3%, whereas, TV advertising saw a -3.2% dip in growth. The online advertising industry is now worth £11.55 billion, this is good news for many businesses in the industry, such as ad tech, because it shows the continuing success and money being put into the industry. As for advertisers, digital ads offers much more efficient and flexible options compared to traditional, offline advertising.

 

Man driving

[source: giphy]

Video is in the driving seat

We know that there’s accelerated growth in the industry, but what is driving this? Video! For the first time, online video has become the largest display format, with an impressive 47% year-on-year growth. Not only this, spend on video surpassed the £1 billion mark in the last year. This evidently demonstrates how important video is to advertisers.

 

Phone scrolling gif

[source: giphy]

Smartphones are also driving growth

It’s interesting to see that 2017 was the first year that UK adults spent more time online on smartphones than on computers and tablets combined, with smartphones accounting for 59% of time in the final quarter of 2017. As we can see, advertisers have noticed this change in media consumption because they spent £5.2 billion on smartphone ads last year - a 37.4% increase on 2016. As smartphones are becoming increasingly popular, we're expecting the ad spend on mobile to increase too.

 

What’s next?

Mobile video will rule

One thing’s for sure, video and mobile will be centre stage in the following year - video as the hottest format and mobile as the most popular platform. So we’re expecting these two to continue to be the main drivers of growth.

A more creative focus

There’s been a recent industry focus on improving ad quality, specifically mobile ads. As the IAB’s Fit For Purpose research shows, “a statistically significant percentage increase in several key brand metrics including, brand consideration (+56%), trust (+33%) and perception of premium (+21%) for the smartphone-optimised ads.”

For better mobile ads, the IAB recommends:

  • Thinking about how the ad will be executed on a smartphone from the start of the creative process
  • Including brand messaging upfront from the start of the ad
  • Testing ads on different screen sizes to ensure text and imagery are clear

So no doubt, creativity in the mobile/video space will flourish as more and more advertisers put more thought and more spend on these formats.

Turning the tables on the duopoly

It’s no secret that the Facebook/Google duopoly is dominating the advertising market, but that doesn’t come without its struggles. Both companies have appeared in the news recently, with the Cambridge Analytica scandal and brand safety troubles on YouTube. This has resulted in a surge of people deleting Facebook and advertisers pulling their spend from YouTube.

This is giving smaller businesses an opportunity to compete with viable alternatives or partnerships. There’s already a huge amount of company consolidation taking place and forecasted, such as telco AT&T are in talks to buy ad tech business, AppNexus. Partnerships between independent publishers could also pose a challenge against the duopoly, like the joint advertising platform for News UK, Telegraph and Guardian.

Could this be the beginning of the tables turning?

The future for Coull

It’s especially exciting times for Coull because we centre our business and technology around video. We strive on being at the forefront of innovation in the video space and it’s great to see that video is now the largest display ad format. We’re proud to be part of a thriving industry.

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A little bit about Eriona

Although Eriona has lived in the tech-centred Bristol for the past 19 years, she is originally from Albania. She has 3 years of finance experience in companies such as HSBC and BDO and is now training to become a chartered accountant.

Her role at Coull is varied but it mainly encompasses the managing of accounts, reporting, invoices and banking. Not only this, she is delving into the world of ad tech and learning about the digital advertising landscape.

Eriona was first drawn to digital advertising because of the huge growth in the industry and she was intrigued in seeing the future of online advertising. Then, she came across Coull, “after some research, I found Coull and their exciting technology. The OverStream Suite itself really interests me because of its versatility in the market and its potential to disrupt many segments of the digital ad market, such as video and display.”

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What the latest PWC and IAB Adspend report means for 2017

The latest PWC and IAB Adspend report has been released, so let’s have a look at what this means for 2017. These figures are based on the first half of 2016 compared with the first half of 2015.

Increased spend

The overall findings show that digital adspend continue to increase and, compared to the same last year, it’s 20% higher. So although Toblerone’s changing shape, at least something in our retail economy is getting bigger: digital adspend.

toblerone - IAB adspend

The report stated that, historically, around 53% of the year’s revenue comes from the second quarter. So we should see further growth when the next report is released. The trajectory is going one way…up!

IAB adspend chart

Domination in mobile revenue growth

IAB adspend - historic mobile video growth

‘Digital video on smartphones and tablets saw strong triple-digit growth, reaching $1.6 billion in HY 2016, an impressive 178% rise from HY 2015.’

We’re seeing strong revenues across the board but, unsurprisingly, the spend has shifted towards the mobile platform.

We know mobile ad formats are doing well, but the IAB has also taken a look at which categories are performing better. It’s no surprise that retail is right there at the top. Mobile-targeted retails ads are only beginning to take-off. So the second half of the year will reveal more about the changing purchase journey.

Whilst desktop search was down from 2015, combined desktop and mobile search is actually up 17%. This just goes to show how the mobile device is taking over. Mobile is definitely an area where more analysis and investment will be focused on in 2017.

IAB adspend - ad revenue by category

Video is really showing its strength across all platforms. As we introduce more relevant and better mobile experiences, mobile video is set to be the main revenue generator for media companies.


Check out The OverStream Suite of advertising formats to see how we’re making better ad experiences that are high performing, yet non-interruptive.

Coull's OverStream Suite of video advertising formats
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