World Economy

UK Digital Ads to Surpass Print

UK Digital Ads  to Surpass PrintUK Digital Ads  to Surpass Print

The UK is predicted to become the first country in the world where more than half of all advertising spent goes to digital media – thanks to a national obsession with gadgets, social media and online shopping.

Group M, the worldwide media buying arm of the market services company WPP, has forecast that the total UK ad market will hit £15.7 billion ($24.6 billion) in 2015. Within this online spend is forecast to grow 12.7% year-on-year to break the £8b mark, making the UK the first in which more than £1 in every £2 of ad spend will go on digital media, The Guardian Online reported.

The next closest countries likely to reach the milestone are Sweden (47% of total ad spend will be digital), Denmark (43%), Australia (42%) and Norway (40%).

Next year, more money will be spent on internet advertising than in traditional media such as newspapers, magazines, TV, cinema, radio, and billboards, posters and buses combined.

Adam Smith, futures director at Group M, said that Britons are gadget-obsessed and advertisers follow such media usage.

“The British are the most enthusiastic online shoppers in the world in terms of spend per head,” he said. “There has always been a high level of credit and debit card use [online]. On top of that Britons have rapidly embraced smartphone and tablet use, all of which has fuelled where advertisers spend their money.”

According to Group M paid search advertising will grow to £4.2b, with about 29% of that on mobile devices, most of which is hoovered up by Google, which has more than 90% share of the UK market.

  Display Ads

The fastest-growing part of the internet market is display advertising, which is forecast to surge 20% next year to £2.7b, with 39% of that mobile display advertising.

Facebook is a huge beneficiary of display ad spend, with eMarketer forecasting that the UK operation will make more than £720m next year.

 “Display has been the main source of UK digital ad growth since 2013, and we [see] this lead growing wider in 2015,” said Group M’s Smith.

“The longer-term question is whether online will wrest [display] investment from network TV with the ease it did from print. This is a fairer fight.”

  Print Losing Ground

Group M is forecasting that more than £160m in print advertising will be lost from the UK newspaper market next year. National newspaper advertising is predicted to decline 8.3% to £908m next year, and £80m year-on-year fall.

Regional newspapers are expected to see a 9.1% fall in print ad revenues to £820m, a fall of £82m year-on-year.

Smith said that the best-case scenario is that newspaper brands are able to make up about 20% of the lost print advertising money from growing digital revenues.

“We estimate that 10% of news brands revenue is digital in 2014,” said Smith. “Advertisers’ demand for online display is rising strongly. Video, social and mobile are the main drivers. News brands must therefore align with these as best they can.”