The continued rise in popularity of online video is one of biggest changes in the digital advertising landscape to occur in the last decade.
Now, according to the Internet Advertising Bureau (IAB) and PwC, advertising spend on online video has overtaken banner ads for the first time in the UK.
According to the duo’s Digital Adspend report, the first half of 2017 saw advertisers spending £699 million on online ads, which amounts to a 46% year-on-year rise. Spend on banner ads meanwhile, fell by 2% to £685 million.
Video continues to be the fastest-growing ad format, now accounting for 35% of all display advertising spend.
“The time people spend watching online video has grown tremendously over the last few years,” IAB’s CEO Jon Mew says.
“It’s little wonder that video is now the fastest-growing ad format as advertisers look to tap into the changing way people consume content.”
People continue to choose mobile as the best way to watch online videos, with time spent watching short video clips online trebling from 51 minutes a week to two hours and 21 minutes in the last three years.
Half of UK internet time is now being spent on smartphones, causing mobile’s share of digital ad spend to rise from 35% to 43% (around £2.37 billion) and 57% of all display ad spend.
“There is no doubt that mobile is the fastest growing area of digital spend, ” said Ian James, GM International, Verve.
“Location based advertising has the potential to power this growth even further forward, bearing in mind that already half of brands are already using location data to target their customers. Ongoing interest in and application of location data relies on advertisers having confidence that the location from publishers is both accurate and precise.”
Display advertising showed growth of 18% to a total of £2 billion, while search continues to rule of the digital advertising roost, growing 15% to £2.8 billion. This means that total digital ad spend was a mammoth £5.56 billion in the first six months of 2017.
With regards to video advertising, spend on outstream/social in-feed has almost doubled, making it the most popular format with 52% of video spend. This means it has overtaken pre-and post-roll ads, which now make up 44% of the total.
“Outstream’s growth is a response to the demand for ‘clean advertising’. For brands and agencies, this means having transparency and verification on ad buys,” said Justin Taylor, UK MD at Teads.
“For consumers this means seeing non-intrusive, quality creative. For publishers, it’s having access to high-yield video inventory and global brand advertisers. Advertisers know that video works: outstream gives them a true third force to ensure their messages are seen and heard at scale.”