IAB UK’s latest Digital Adspend report, produced with PwC, has found that the UK digital ad market maintained double-digit growth of 11% to £26.1 billion in 2022.
Despite a challenging year in which advertisers navigated the cost-of-living crisis, political uncertainty, and the impact of structural changes such as the removal of Identifier for Advertisers (IDFA), digital ad spend saw a 56% overall increase since the pandemic began in 2020.
Maintaining market dominance was search which was up 13% year-on-year to £13.1 billion. Display investment also grew by 6% to £10.4 billion, with growth in this area fuelled by a 14% rise in the use of standard display ads. Video spend in this area also rose by 9%.
Marketing a sector-wide first, the Digital Adspend 2022 report also included an official sizing of the UK’s digital retail media market with spend standing at £176.4 million.
The rate of growth in desktop spend rose by 14%, outstripping mobile which grew by 8% for the first time since records began, a discovery that coincides with Apple’s IDFA changes in-app. Nevertheless, mobile still has the largest share of the market at 58%.
In other areas, podcast, wearable device and in car advertising spend all increased significantly. Podcast spend grew by 32% to £76.3 million, a three-fold increase since IAB UK first started measuring the market in 2020.
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“Today’s results also reflect the growing opportunities for advertisers to resonate with audiences in new ways,” IAB UK CEO Jon Mew said. “Of course, search and display spend still underpin the digital ecosystem, but the UK’s flourishing retail media market – officially sized for the first time in this report – alongside the continued growth of podcasting, show how digital is diversifying to offer advertisers more choice and more immersive routes to connect with consumers.”
PwC senior manager Hannah Biernat added: “This year’s Adspend results reflect a stabilisation of the market growth in line with pre-pandemic levels, demonstrating the robustness of the industry and its ability to weather wider spread economic and political uncertainties.
“Clients appear to be embracing connecting with audiences in emerging formats as demonstrated by the growth in podcast investment and formats across connected devices. It will be exciting to see how the industry continues to innovate and diversify in formats and channels in the coming year.”
