Mobile is set to be the number one media line item for UK marketers

Posted on: Wednesday 12 April 2017 | Guy Phillipson

Chairman of iCrossing & Former IAB UK CEO Guy Phillipson, writes on our new IAB/PwC ad spend figures that confirm all £1.2bn growth in 2016 was driven by mobile, ten years after the release of Apple's iPhone.

First published in The Drum

"Every once in a while, a revolutionary product comes along and changes everything." These were the opening words of the late, great Steve Jobs when he launched the iPhone at MacWorld in January 2007.

But it has to be said, mobile advertising didn’t exactly catch on in a flash (or in HTML5 for that matter.) In fact – as CEO of the Internet Advertising Bureau – I must have heard the words, “…so, when’s the year of mobile, then?” every month for seven years, until mobile ad spend hit £1bn in 2013. Now, of course, we all know the smartphone has become the hub of our daily lives, and the most popular device for accessing the internet - and the rocketing spend reflects that behaviour. Mobile advertising grew by a staggering 51% to reach nearly £4bn in 2016.

Total digital ad spend smashes through £10.3bn, accounting for the majority of all UK media spend.

That’s a landmark headline – not just because web advertising was nothing more than a £8m rounding error 20 years ago, but because even in the face of Brexit and the well-documented ad verification issues challenging the display market, digital spending grew 17.3% in 2016. This £1.2bn digital increase will drive total UK media (including traditional) to register growth of around 6% when the full 2016 figures finally get published.

More precisely, the whole UK media market is now driven by mobile, as desktop ads recorded an almost flat year. At this week’s IAB/PwC ad spend results presentation, due credit was afforded to the impressive 26% growth of display (now £3.7bn), and within that, video (up 56% to become a £1bn format), and the continued surge of paid content and native (up 28%). So, you could be forgiven for thinking that with relatively modest 15% growth, paid search is approaching the right-hand side of the bell-curve. Well, the stats behind that growth are astonishing...

PPC search is now a £5bn medium on its own – and in 2017 it should become the largest UK media channel. This must be a world first.

I had the pleasure of presiding over 24 IAB/PwC ad spend presentations, with new news to impart every six months. Now, from my new position on the bridge at iCrossing UK, we can see aggregated figures for search across our client base of household brands. And the mobile versus desktop search story provides essential context.

In the first half of 2015, desktop search still dominated at every level for our clients. Then from July that year mobile began to dominate search volumes, and shortly accounted for the most clicks, too. But it wasn’t until October of 2016 that mobile also accounted for the majority of client PPC spend. And so it was that the golden combination of consumer behaviour and channel liquidity made mobile search the number one line item for our clients. This in turn put even more emphasis on mobile optimised sites, smooth transactional apps, and a mobile user experience from heaven – all of which we excel in, of course.

The most switched-on brands have a healthy obsession with data and measurement, which is why display ad verification is rightly under the microscope this year. I believe, however, that solving issues like viewability will be fairly straightforward; it’s a transactional thing which data can solve – just like the nirvana of right ad, right place, right time.

The real issue for advertising has been the fact that data experts and creatives still live on different planets. But I think that’s going to change this year. I sense a real excitement about bringing creativity and data closer together, as digital channels continue to grow to become the main (sometimes the only) focus of the media plan, and consumers demand more relevant and personalised experiences.

And the brilliant thing is – we consumers have a simple way to show our interest. In the words of Steve Jobs at the launch of the iPhone: “We are all born with the ultimate pointing device — our fingers - the most revolutionary user interface since the mouse”.

For millions of people, the mobile is already their first screen, and in a couple of years, the largest slice of UK ad spend will go on smartphones. 2017 has to be the year that data and creativity join hands for a beautiful future.

Written by

Guy Phillipson


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