Mobile Advertsing Increases, Marketing Spend Increases: A slight positive for the UK economy

It was stated today that the UK digital advertising spend growth has decelerated in 2012 due to the introduction of the fact that more marketers chose to trial with mobile formats, which cost less than the average desktop method, (O'Reilly, 2013). Marketing Week author Laura O'Reilly (2013) continued in stating that ‘Digital advertising spend increased by 12.5 per cent to £5.42bn in 2012, according to the latest IAB digital ad spend report, conducted by PwC. Growth was down slightly from the 14.4 per cent registered in 2011.’

The IAB/PwC full-year study established that the mobile spend more than doubled (147 per cent) to £525m, up from £203.2m, which accounted for 9.7 per cent of digital advertising spend in 2012. In 2011 advertising on mobile devices grew 157 per cent, although this came from a lower starting point. Tim Elkington, the director of research and strategy at IAB, stated that the mobile marketing industry has now reached this landmark because of the change in perceptions from consumers who now inevitably expect to engage with brands wherever they are. Due to this, marketers and advertisers are progressively purchasing integrated marketing campaigns across the online and mobile platforms rather than the long-standing thought of regarding mobile as an afterthought.

O’Reilly (2013) specified that in the past six months, a further twenty (of the top 100 UK advertisers) launched ‘mobile-optimised sites.’ The launch of 4G, by the company ‘EE’ is said to double the average download speeds in the main cities. This introduction, alongside others have been said to be factors that are likely to “drive mobile advertising’s growth even further in 2013.”

O'Reilly (2013) lists some of the current figures within the industry:

• Display advertising across the entire digital sector was boosted by the increase in video and social media advertising. Video grew 46 per cent to £160m (up 50 per cent in 2011), while social media advertising grew 24 per cent to £328.4m (75 per cent in 2011).
• Elsewhere, paid-for search marketing now accounts for 58 per cent of all digital ad spend, having increased 14.5 per cent to £3.17bn in 2012 (17.5 per cent in 2011).
• Classifieds, another major sector, grew 6.3 per cent to £853.7m (5.2 per cent in 2011), accounting for 16 per cent of digital ad spend.
• The FMCG sector overtook finance as the biggest spender on digital display for the first time last year, accounting for almost 16 per cent of spend.

 Anna Bartz, senior manager at PwC, believes that the market for advertising is flowing towards integrated campaigns that provide a story and that give a ‘greater prominence to video and display formats with a higher degree of interactivity with the target audience.’ Over the previous two years, the digital advertising revenue model has also been said to have changed from an importance on direct response to being now more about branding and awareness, (O'Reilly, 2013).

 

Listed below are a range of facts that have been taken from Russell Parsons Marketing Week report. He found that the marketing budgets for the next financial year has been set at the highest figure for over two years, this is due to the fact that the marketers predict that increased activity will grow sales; even though (as noted near the end of the text) the latest Bellwether report stated that the UK economy is still rather ‘subdued’.

 

• ‘The quarterly survey of 300 senior marketers from the UK’s top companies, a respected barometer of confidence in the industry, found 36 per cent setting budgets higher for 2013/14 compared to 23 per cent reducing spend. The net balance of 13 per cent is the highest since the first quarter of 2011.’

• ‘More than a third (36 per cent) of the marketing chiefs polled are expecting improvements in the performance of their own companies, up from 28 per cent in the previous quarter. Less than a fifth (19 per cent) are more pessimistic that they were at the end of 2012.’

The news comes despite further indications UK economic growth remains flat. The National Institute of Economic and Social Research stated yesterday (10^th April) that the UK economy grew by a mere 0.1 per cent in the first quarter of 2013, meaning the UK avoided a triple dip recession by a whisker.