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Digital Advertising - UK - March 2017

“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.”
– Sara Ballaben, Senior Technology Analyst

This report examines the following issues:

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

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Table of contents

  1. 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

                                                                                                                                  Companies Covered

                                                                                                                                  To learn more about the companies covered in this report please contact us.

                                                                                                                                  Digital Advertising - UK - March 2017

                                                                                                                                  US $2,478.79 (Excl.Tax)