IAB: Digital ad spend surges 49% in H1 2021, as marketers’ confidence returns

Digital ad spend saw huge year-on-year growth in the first half of 2021, according to IAB UK’s H1 Adspend update, released today. The data, produced with PwC, shows a half-yearly spend of £10.5bn, which is up 49% vs H1 2020 and 42% vs H1 2019 – the last comparable period that did not include lockdown measures.

This growth – the biggest ever increase since the IAB started recording spend bi-annually – came as businesses and advertisers found themselves better prepared for the third national lockdown, introduced in January 2021. With the ecommerce market flourishing, production logistics back on track and a roadmap out of lockdown in place, including the roll out of the UK’s vaccine programme, digital ad spend saw record rates of recovery in H1 2021.

Meanwhile, consumer confidence continued to grow as people of all ages adapted to a digital-led lifestyle. According to UKOM-endorsed data from Ipsos, the online population in the UK has increased 6% since the start of the pandemic – with the over-75s providing the biggest increases at 43%.

The IAB’s update shows that search remains the single biggest digital channel – up 49% year-on-year to £5.5bn – while the display market has also grown considerably, up 55%. One prominent performer within display was video, which rose 70% year-on-year to £2.3bn – an increase of 79% compared to 2019.

Elsewhere, in a period when we were anything but mobile, there was a 75% year-on-year increase in mobile ad spend – giving the channel a 64% share of all digital investment and indicating its power as an outlet for media consumption, whether at home or on the move.

Overall, digital advertising’s growth is indicative of a wider confidence in the advertising market. The most recent IPA Bellwether report for Q2 2021 showed the strongest upward revisions of marketing budgets since Q1 2019, with overall ad spend forecasts from AA/WARC also upwardly revised since the start of the year.

The pandemic forced businesses to either accelerate or improve their ecommerce offering to cater to a nation of housebound consumers – we saw three years of change take place in just three months. Advertisers in turn adopted a more digital-heavy strategy as it was the medium least impacted by lockdowns. Meanwhile, the surge in video spend runs parallel to an explosion in short form video content and a move from advertisers to harness this as a vehicle for effective brand building.

Jon Mew, CEO IAB UK