Digital ad spend soars 41% to hit record high in 2021
Posted on Friday 22 April 2022 | IAB UK
IAB UK’s Digital Adspend report for 2021, conducted with PwC, shows that the digital advertising market grew by 41% last year to a total of £23.5 billion
Our full-year Digital Adspend report for 2021 shows that the digital advertising market saw its biggest full year growth for 15 years last year, with investment up 41% year-on-year to £23.5 billion. The report, which is conducted with PwC, shows that 2021 spend was also up 50% on 2019, the last full year in which the pandemic did not have an impact on activity.
With the market having seen modest growth in 2020, the latest results show that advertisers’ confidence rebounded in 2021 - a year which started with a full lockdown and ended with work-from-home advice reissued. Here are some of the key takeouts:
- Search attracted the largest share of overall spend, up 38% to £11.7 billion. For the first time, Digital Adspend has captured advertisers’ investment in search shopping ads, which totalled £3.5 billion in 2021 - reflecting the blossoming ecommerce market
- Spend on display ads was up 53% to £9.7 billion, with both social and non-social display up by more than 50%
- Video continued to drive the majority of display growth, up 58% to £5.5 billion. Spend on banner ads surged by 60%, suggesting that advertisers are reevaluating the value of standard display formats as part of their campaigns
- Significantly, this year’s results reveal that digital ad spend grew across the board with the total market up 33% excluding the industry’s five largest companies.
- Mobile accounted for 60% of total spend, up 43% year-on-year to £14.13 billion
- Podcast investment was up 61% year-on-year to £54 million, while digital audio’s annual growth rate multiplied from 17% in 2020 to 58% in 2021
Commenting on the results, Jon Mew, CEO of IAB UK, said: “After a 5% rise in digital ad spend in 2020, we were confident that 2021’s results would be much stronger, but for the market to be up 50% on pre-pandemic spend is incredible and testament to the resilience of our world-leading industry. It’s particularly exciting to see emerging formats such as in-game advertising and podcasts continue to gather pace and offer new, untapped opportunities for growth.
“However, we shouldn’t lose sight of the fact that 2021 still wasn’t a normal year. We spent half of it in some form of lockdown - bringing with it an increased reliance on digital channels - while the return of large-scale events such as the Olympics and Paralympics in H2 will also have impacted spend.
“Ultimately, while growth on this scale is truly brilliant to see, what matters most is how we sustain investment in the long-term, beyond recovery and in the face of growing regulatory scrutiny. As an industry, we should take confidence from the results announced today and channel that into pulling together to ensure a sustainable future for digital advertising.”