UK Digital adspend to reach £8bn by 2016 as Mobile spend accelerates

The Internet Advertising Bureau (iab) today published their 2012 UK Digital Adspend Full Year Results  which is a joint iab/PwC  Study.

We have extracted iab’s adspend figures from 2000 to give the overall scale of the growth. We reckon it shows a compound annual growth rate (CAGR) approaching 32%. This is of course likely unsustainable. Looking at Boston Consulting Group’s (BCG) forecast of UK online advertising spend growth in their $4.2 trillion Opportunity Report they are forecasting a CAGR of 7.7% from 2010 to 2016.

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This would take the adspend to over £6 billion by 2016. iab have a like for like* growth from 2011 of 12.5% (14.4%) and the total, sort of raw, growth is we calculate about 13.2% (16.8%). Using a power trendline it looks as if it could reach £8 billion around 2016.

BUT and it’s a biggish but the growth rate is increasingly likely to be dominated by Mobile rather than Fixed device online advertising. In fact the iab have moved from Online to Digital as their reports title this year!

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Our table simply uses raw rather than like for like* increases in spend but the message is clear.  The Mobile proportion of total spend increased from 4.2% to 9.7% this year and at that rate of growth it will only be a few years before it represents the majority of the spend!

iab Press release

* iab “Methodology for like-for-like reporting – To provide the most accurate like for like growth rates, only companies that submitted in 2011 and 2012 are included in the year on year growth calculation.

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