Digital Advertising - UK - March 2017


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Mintel

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Ad personalisation through user input is key to boosting engagement; particularly as many consumers are showing interest in ad-blocking. But there isn’t necessarily a one-size-fits-all solution to balance personalisation and intrusiveness, as individual users have different attitudes towards their personal information and the extent to which they are happy to share it in exchange for a free service or other benefit.

Table of Content

OVERVIEW
What you need to know
Products covered in this Report

EXECUTIVE SUMMARY
The market
Digital adspend hits the £10 billion mark in 2016
Figure 1: Forecast of digital advertising expenditure in the UK, 2011-21
Figure 2: Forecast of digital advertising expenditure in the UK, 2011-21
Growth of mobile could pose challenge to paid search
Figure 3: Mobile adspend as a proportion of total digital expenditure, 2010-16
Companies and brands
New developments related to ad-blocking
Social media advertising
The consumer
Newer formats now gain similar exposure to traditional digital formats
Figure 4: Digital advertising formats noticed by consumers in the last three months, December 2016
Mobile viewing drives popularity of video ads
Figure 5: Digital advertising formats noticed by consumers in the last three months on a smartphone or tablet, December 2016
Less than a quarter of people have clicked through
Figure 6: Actions taken in response to online ads noticed in the last three months, December 2016
Video ads are the most annoying format
Figure 7: Perceptions of digital advertising formats, December 2016
Nearly a fifth of consumers have paid for some form of ad-blocking
Figure 8: Attitudes towards paying for ad-blocking, December 2016
Catering for different degrees of ad personalisation
Figure 9: Attitudes towards digital advertising (1/2), December 2016
The challenges of the mobile adpsace
Figure 10: Attitudes towards digital advertising (2/2), December 2016
What we think

ISSUES AND INSIGHTS
There is no one-size-fits-all strategy for ad personalisation
The facts
The implications
Addressing the growth of ad-blocking beyond ad personalisation
The facts
The implications
The upcoming gate-keepers of mobile advertising
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Digital adspend hits the £10 billion mark in 2016
Paid search accounts for majority share of digital adspend
Almost £2 of every £5 spent on digital advertising now goes to mobile
The impact of changing viewing habits
App market’s maturity drives in-app advertising revenues
Threats and opportunities presented by ad-blocking

MARKET SIZE AND FORECAST
Digital adspend hits the £10 billion mark in 2016
Figure 11: Forecast of digital advertising expenditure in the UK, 2011-21
Slowing growth expected ahead
Figure 12: Forecast of digital advertising expenditure in the UK, 2011-21
Forecast methodology

SEGMENT PERFORMANCE
Paid search accounts for majority share of digital adspend
Figure 13: Segmentation of digital advertising expenditure in the UK, 2015
Almost £2 of every £5 spent on digital advertising now goes to mobile
Figure 14: Mobile adspend as a proportion of total digital expenditure, 2010-2016

MARKET DRIVERS
Almost half of total adspend is now digital
Figure 15: Estimated advertising expenditure, by media channel, 2016
The impact of changing viewing habits
Figure 16: Average daily minutes of TV screen time, by activity type, 2014 and 2015
App market’s maturity drives in-app advertising revenues
Figure 17: Worldwide in-app advertising revenues, 2015, 2016 and 2020
Threats and opportunities presented by ad-blocking
Figure 18: Motivation behind ad-block usage, 2016

COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
iOS 10 introduces stricter ad-tracking limits
Coalition for Better Ads aims to develop global standards for online advertising
EU halts plans for network-level mobile ad-blocking
Sponsored data opens new opportunities to reach out to consumers
Unskippable ads will be history on YouTube
Facebook to push on video monetisation

LAUNCH ACTIVITY AND INNOVATION
iOS 10 introduces stricter ad-tracking limits
Coalition for Better Ads aims to develop global standards for online advertising
EU halts plans for network-level mobile ad-blocking
Sponsored data opens new opportunities to reach out to consumers
Unskippable ads will soon be history on YouTube
Facebook to push on video monetisation

THE CONSUMER – WHAT YOU NEED TO KNOW
Newer formats now gain similar exposure to traditional digital formats
Mobile viewing drives popularity of video ads
Online ads struggle to engage
Nearly a fifth of consumers have paid for some form of ad-blocking
Catering for different degrees of ad personalisation
The role of mobile operators and messaging apps in the mobile adpsace

DIGITAL ADVERTISING FORMATS
Newer formats now gain similar exposure to traditional digital formats
Figure 19: Digital advertising formats noticed by consumers in the last three months, December 2016
Digital divide becomes apparent for new ad formats
Figure 20: Proportion of consumers who noticed each digital advertising format in the last three months, by age, December 2016
Mobile viewing drives popularity of video ads
Figure 21: Digital advertising formats noticed by consumers in the last three months on a smartphone or tablet, December 2016

REACTIONS TO DIGITAL ADVERTISING
Less than a quarter of people have clicked through
Figure 22: Actions taken in response to online ads noticed in the last three months, December 2016
Online ads get noticed but struggle to engage
Figure 23: Repertoire of digital advertising formats noticed by consumers in the last three months and repertoire of actions taken in response to online ads noticed in the last three months, December 2016
The importance of reaching out to younger audiences
Figure 24: Proportion of consumers who reacted to online ads noticed in the last three months, by age, December 2016
The impact of ad placement
Figure 25: Proportion of consumers who reacted to online ads noticed in the last three months, by online activities performed in the last three months, December 2016

PERCEPTIONS OF ADVERTISING FORMATS
Video ads are the most annoying format
Figure 26: Perceptions of digital advertising formats, December 2016
Improving perception of ads through users’ input…
and freemium options

ATTITUDES TOWARDS PAYING FOR AD-BLOCKING
Nearly a fifth of consumers have paid for some form of ad-blocking
Ad-blocking software
Figure 27: Attitudes towards paying for ad-blocking, December 2016
Paying for ad-free music and video streaming
Ad-free apps
Ad-free online newspapers
Young men the most likely to have paid to remove online ads
How big a threat is ad-blocking?
Figure 28: Actions taken in response to online ads noticed in the last three months, by attitudes towards paying for ad-blocking, December 2016

ATTITUDES TOWARDS DIGITAL ADVERTISING
Catering for different degrees of ad personalisation
Figure 29: Attitudes towards digital advertising (1/2), December 2016
The role of mobile operators and messaging apps in the mobile adpsace
Figure 30: Attitudes towards digital advertising (2/2), December 2016

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
Market size and forecast
Fan chart forecast
Figure 31: Best- and worst-case forecast for the value of the UK digital advertising market, 2016-21

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