Online UK adspend may reach £8 billion by 2016

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The Internet Advertising Bureau UK (iab) recently published their 2011 Online Adspend Full Year Results which is a joint iab/PwC Study.

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We have extracted iab’s reported adspend figures from 2000 to give the overall scale of the growth. We reckon it shows a compound annual growth rate (CAGR) of over 35%. This is of course likely unsustainable. Looking at the Boston Consulting Groups (BCG) forecast of UK online advertising spend growth in their “$4.2 trillion Opportunity Report” they predict a CAGR of 7.7% from 2010 to 2016. This would take the adspend to over £6 billion by 2016. iab have a like for like* growth rate this year of 14.4% and the total, sort of raw, growth is we calculate about 16.8%. With the iab confidently predicting over £5 billion spend during 2012 it looks as if  the adspend could reach £8 billion around 2016.

The iab also have a separate report on Mobile adspend  “Advertising on mobile devices rose by 157%* in 2011, to a new high of £203million, as a result of increased smartphone ownership, the proliferation of touchscreen technology, 3G, and soaring tablet sales, which sparked a surge in interest from brands, especially in the Retail and Consumer Goods (FMCG) sectors.”

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The comparative split of the spend by major category shows the following:

Online Mobile
Search 57.8% 66.1%
Display 23.6% 33.9%
Classified 16.4%      -
Other   2.2%      -
100.0% 100.0%

 

In the report iab mention that “….. tablet spend measured for the first time.

Although only launched in 2010, tablets are now an everyday device with more than 4.1 million Britons owning one**. As a consequence, the IAB has measured tablet-specific advertising for the first time and found that £2.4 million was spent in 2011.”

Further info and their video is available as part of their press release.

* iab‘s “Methodology for like-for-like reporting – To provide the most accurate like for like growth rates, only companies that submitted in 2010 and 2011 are included in the year on year growth calculations”

**comScore, January  2012

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