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Digital Advertising - UK - May 2018

“The digital advertising market is expected to continue its growth despite potential challenges to programmatic services from the GDPR. Indeed, the regulation may serve to actually improve consumer confidence in an industry which is being criticised over the indiscriminate collection of personal data. An industry-wide standard for ad quality is also gaining momentum which aims to remove the most disruptive advertising formats from sites, and it is hoped that this will tackle the root cause of why consumers choose to block advertising on their devices.”
–Andrew Moss, Consumer Technology Analyst

This Report looks at the following areas:

  • User experience key to ad acceptance
  • The battle against indiscriminate data tracking

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • Growth despite disruption from the approaching GDPR
              • Paid-for search makes up the majority of adspend
                • Figure 1: Forecast of digital advertising expenditure in the UK, 2012-22
              • Mobile advertising continues strong growth
                • Figure 2: Mobile adspend as a proportion of total digital expenditure, 2010-17
              • Adapting to ad-blocking
                • Drive for ad quality
                  • Brand safety a priority
                    • Header bidding makes programmatic more valuable
                      • Effects of the GDPR on ad targeting
                        • Companies and brands
                          • YouTube limits availability of advertising revenue
                            • Facebook expands its ad optimisation scheme
                              • Direct shopping links offered through Instagram
                                • The consumer
                                  • Search ads most noticed
                                    • Video advertising most noticed on mobile
                                      • Almost half noticing ads engage with them in some way
                                        • Users rarely share social media ads
                                          • Figure 3: Digital advertising formats noticed by consumers in the last three months, December 2017
                                          • Figure 4: Digital mobile advertising formats noticed by consumers in the last three months, December 2017
                                          • Figure 5: Actions taken in response to online ads noticed in the last three months, December 2017
                                        • Online media offers more flexibility for video advertising
                                          • Social feed and static ads share similar attributes
                                            • Few willing to share data with advertisers
                                              • Managing ad preferences on sites
                                                • The issue of brand safety
                                                  • Figure 6: Consumer response to digital advertising, December 2017
                                                • Ad-blocking prevalent, but these users are valuable
                                                  • Almost half accept ads for free content
                                                    • Figure 7: Consumer reactions to and attitudes towards digital advertising, December 2017
                                                  • What we think
                                                  • Issues and Insights

                                                    • User experience key to ad acceptance
                                                      • The facts
                                                        • The implications
                                                          • The battle against indiscriminate data tracking
                                                            • The facts
                                                              • The implications
                                                              • The Market – What You Need to Know

                                                                • Growth despite disruption from the approaching GDPR
                                                                  • Paid-for search retains the majority of expenditure
                                                                    • Spend on mobile advertising continues to grow
                                                                      • Digital advertising revenue adapts to ad-blocking
                                                                        • Drive for better-quality ads
                                                                          • Programmatic enters a new phase with header bidding
                                                                            • The GDPR
                                                                            • Market Size and Forecast

                                                                              • Growth despite disruption from approaching GDPR
                                                                                • Figure 8: Forecast of digital advertising expenditure in the UK, 2012-22
                                                                                • Figure 9: Forecast of digital advertising expenditure in the UK, 2012-22
                                                                              • Forecast methodology
                                                                              • Market Segmentation

                                                                                • Paid-for search retains the majority of expenditure
                                                                                  • Figure 10: Digital adspend market breakdown, 2010-17
                                                                                • Spend on mobile advertising continues to grow
                                                                                  • Figure 11: Mobile adspend as a proportion of total digital expenditure, 2010-17
                                                                                  • Figure 12: Self-reported app category use amongst app users, July 2017
                                                                              • Market Drivers

                                                                                • Digital advertising revenue adapts to ad-blocking
                                                                                  • Drive for better quality ads
                                                                                    • CBA begins Better Ads Experience Programme
                                                                                      • Desktop
                                                                                        • Mobile
                                                                                            • Figure 13: Examples of mobile ad types proscribed in the Better Ads Experience Programme.
                                                                                          • Chrome crackdown on ads
                                                                                            • Brand safety a priority for the advertising market
                                                                                              • Publishers must balance providing an open platform with being advertiser-friendly
                                                                                                • Stop Funding Hate – A powerful pressure group that can influence editorial content
                                                                                                  • A lasting role for native advertising and influencer marketing
                                                                                                    • Programmatic enters a new phase with header bidding
                                                                                                    • Regulatory and Legislative Changes

                                                                                                      • The General Data Protection Regulation (GDPR)
                                                                                                        • Consent
                                                                                                          • Legitimate interest
                                                                                                          • Companies and Brands – What You Need to Know

                                                                                                            • YouTube gets strict on advertising access
                                                                                                              • Amazon launches Transparent Ad Marketplace (TAM)
                                                                                                                • Spotify Ad Studio expands to the UK
                                                                                                                  • Facebook launches ‘trip consideration’ ad strategy
                                                                                                                    • Direct shopping links offered through Instagram
                                                                                                                    • Launch Activity and Innovation

                                                                                                                      • YouTube gets strict on advertising access
                                                                                                                        • Amazon launches Transparent Ad Marketplace (TAM)
                                                                                                                          • Spotify Ad Studio expands to the UK
                                                                                                                            • Facebook launches ‘trip consideration’ ad strategy
                                                                                                                              • Direct shopping links offered through Instagram
                                                                                                                              • The Consumer – What You Need to Know

                                                                                                                                • Search engine advertising most-noticed format
                                                                                                                                  • Video advertising the most-seen format on mobile
                                                                                                                                    • Almost half noticing ads engage with them in some way
                                                                                                                                      • Advertisers must balance ad intrusion with value for money
                                                                                                                                        • Less than one in five willing to share personal data with advertisers
                                                                                                                                          • Brand safety is a real issue
                                                                                                                                            • Mobile ad-blocking less common than PC
                                                                                                                                              • Users reject sites with intrusive ads
                                                                                                                                              • Advertising Exposure

                                                                                                                                                • Search engine advertising most-noticed format
                                                                                                                                                  • Video advertising the most-seen format on mobile
                                                                                                                                                    • Mobile social ads overtake pop-up and banner ads
                                                                                                                                                      • Advertisers must consider transparency when sponsoring posts
                                                                                                                                                          • Figure 14: Digital advertising formats noticed by consumers in the last three months, December 2017
                                                                                                                                                          • Figure 15: Digital mobile advertising formats noticed by consumers in the last three months, December 2017
                                                                                                                                                      • Advertising Engagement

                                                                                                                                                        • Almost half noticing ads engage with them in some way
                                                                                                                                                          • Figure 16: Actions taken in response to online ads noticed in the last three months, December 2017
                                                                                                                                                        • Engagement highest amongst younger internet users
                                                                                                                                                          • Figure 17: Any reported action taken in response to online ads noticed in the last three months, by age, December 2017
                                                                                                                                                        • Users rarely share social media ads
                                                                                                                                                        • Digital Advertising Correspondence Analysis

                                                                                                                                                          • Methodology
                                                                                                                                                            • Advertisers must balance ad intrusion with value for money
                                                                                                                                                              • Online media offers more flexibility for video advertising
                                                                                                                                                                • Social feed and static ads share similar attributes
                                                                                                                                                                  • Figure 18: Attributes associated with types of adverts – Correspondence analysis, December 2017
                                                                                                                                                                  • Figure 19: Attributes associated with types of adverts – Correspondence analysis, December 2017
                                                                                                                                                              • Data Sharing and Targeted Advertising

                                                                                                                                                                • Less than one in five willing to share personal data with advertisers
                                                                                                                                                                    • Figure 20: Consumer response to digital advertising, December 2017
                                                                                                                                                                  • Social media users do manage their ad preferences
                                                                                                                                                                    • Brand safety is a real issue
                                                                                                                                                                    • The Consumer-Advertiser Relationship

                                                                                                                                                                      • Mobile ad-blocking less common than PC
                                                                                                                                                                        • Almost half accept ads for free content
                                                                                                                                                                            • Figure 21: Consumer reactions to and attitudes towards digital advertising, December 2017
                                                                                                                                                                          • Ad-block users see and interact with more ads
                                                                                                                                                                              • Figure 22: Digital advertising formats noticed by consumers in the last three months, by ad-block users vs non-users, December 2017
                                                                                                                                                                            • Users reject sites with intrusive ads
                                                                                                                                                                            • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                • Abbreviations
                                                                                                                                                                                  • Consumer research methodology
                                                                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                                                                    • Market forecast
                                                                                                                                                                                      • Figure 23: Forecast of digital advertising expenditure in the UK, 2012-22
                                                                                                                                                                                    • Forecast methodology

                                                                                                                                                                                    Digital Advertising - UK - May 2018

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