Online ads to account for 62% of UK adspend in 2020

Online advertising: linked to growth in online retail
Online advertising: linked to growth in online retail

UK largest online advertising marketing in Europe and third-largest in the world.

More than £3 in every £5 (62%) spent on advertising in the UK will be accounted for by online media by next year, according to a report by the UK advertising's think tank Credos, in partnership with Enders Analysis.

The Advertising Association's report, Advertising Pays 7: UK Advertising’s Digital Revolution, the seventh in the Advertising Pays series, examines the growth and scale of the UK online advertising market compared with other countries. Findings show the UK is the largest online advertising market in Europe, behind the US and China, with online accounting for 57% of total UK adspend in 2018

Previous reports in the series have focused on the diversity of the UK's advertising talent and the value of advertising to the UK’s culture, media and sport, among other themes. 

The report also outlines the extent to which the UK’s strong online economy has channelled the growth of online advertising, saying that "at £1,868 per person, the UK retail ecommerce expenditure per capita is higher than in any other G20 market".

It also highlighted the boom in the UK adtech sector, which has attracted more than £1bn in investment since 2013 and employs more than 19,000 UK workers. The findings also point to the connection between online advertising and UK small and medium-sized businesses, showing how an increasing number of SMBs are advertising online, rising from 30% of SMBs in 2013 to 42% in 2017, and how this is helping to boost their operations.

Karen Fraser, director at Credos, said: "As we passed the point where online advertising accounted for more than 50% of total advertising expenditure, we decided it was time to review the impact of digitalisation on our industry.

"This report, which shows how UK advertising is at the forefront of technological developments worldwide, is the result. It is particularly interesting to see how closely linked our industry has become with the rate of growth of online retail and we expect to see this continue in the coming years." 

The online advertising sector would "not be immune to the economic headwinds facing Britain and will be regulated just like every other maturing industry has been", according to Claire Enders, founder of Enders Analysis, added.

"But the underlying adaptability of UK businesses and the advertising community will see online advertising through to an even brighter future," she added.

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