Digital adspend surges by 42% compared with pre-pandemic levels

4 Oct 2021

Digital advertising spending in the UK has recovered to levels higher than those seen before the pandemic, the latest data from the Internet Advertising Bureau (IAB) has shown. 

Spending on digital advertising totalled £10.5bn in the first six months of 2021 – a 42% jump compared with the same period in 2019 when spending reached £7.3bn, according to the IAB.

The slight dip in digital adspend during H1 in 2020 – down to £7.1bn, and covering the initial lockdown period – has given way to a 49% increase in 2021. This represents the biggest ever jump recorded by the IAB.

Experts behind the data analysis said the latest figures are “really encouraging”, considering spending is now higher than it was before Covid.

The adspend data, collected biannually by audit firm PwC, is taken from the IAB’s members and other sources, including from the World Advertising Research Center (Warc).

In this latest update, the IAB data also revealed search remains the biggest digital channel, with H1 spending totalling £5.5bn in 2021, up 49% on the same period in 2020.

Meanwhile, display advertising spending grew by 55% compared with last year, including a rise in spending for video, to £2.3bn, which is also 79% higher than in 2019.

Mobile adspend rose by 75% in the first half of 2021 compared with the previous year, which means it now holds a 64% share of all digital spending.

IAB UK chief executive Jon Mew said: “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.”

PwC senior manager Stephanie Claxton, added: "The results of the first six months of digital ad spend are really encouraging. 

“Not only have we seen the growth we expected on 2020 but also 42% growth on 2019. This is testament to the breadth of offerings available to advertisers in digital and the critical roles they play."

IAB’s annual report for 2020, released earlier this year, found digital adspend in the UK grew by 5% across the whole of 2020, despite taking a major hit in the second quarter as a result of the initial impact of the Covid pandemic.

The Advertising Association's forecast for 2021, covering all of the UK advertising sector, has predicted adspend will grow 18.2% this year, giving a total market size of £27.8bn.

The findings, produced with Warc, show the ad market will be almost 10% bigger this year than it was in 2019.

Source: Campaign Live, Nicola Merrifield