‘Creative ecommerce’ drives UK adspend at fastest growth rate since 2010

Advertisers shifting more budgets into blurring the physical and virtual customer journey have contributed “significantly” to the fastest rate of ad spend growth since 2010, according to a report.

Brands are being more "creative" with ecommerce, according to a report.
Brands are being more “creative” with ecommerce, according to a report.

The Advertising Association/Warc quarterly study revealed advertising spend rose 8.5% to £4.5bn in the three months to June, the highest since Q3 in 2010. A maturing attitude to digital marketing played a key role in the increase with Internet ad spend up 17.2% in the period, the second highest riser after radio (17.7%).

Display advertising, which includes direct mail, climbed 7.7% due to strong quarters from TV and radio, according to the report. While the growth is expected to slow to just over 5% in the remaining half of the year, predicted demand for display in 2015 will push internet ad spend to £8.1bn compared to 2014’s projected £7.2bn outlay. Search marketing, which is forecast to grow from £3.9bn to £4.3bn between 2014 and 2015, will also fuel advertising expenditure.

Tim Lefroy chief executive of the Advertising Association, says the performance of digital media so far in 2014 points to “digital and creative leadership in e-commerce”. As the “Eurozone wobbles, it’s a reminder that our consumer economy is central to the UK’s economic narrative”, he adds.

The insight is supported by companies such as Mondelez, Diageo and Domino’s tightening the link between online ads and search marketing to move further into ecommerce, which is considered a well of untapped potential for food and drink marketers. Roughly 60% of UK GDP is household consumption – higher than in many other markets – according to the Advertising Association and “e and m commerce are an increasingly large part of that picture”.

Elsewhere, ad spend was up across the media mix as radio, news, magazine and direct mail, which were all down in the first quarter of the year, posted rises in the following quarter.

The positive outlook was reflected in the findings from the latest Bellwether report, which said over 25% of companies planned to increase the marketing spend over the third quarter of 2014.

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Comments
  • VisualDNA 3 Nov 2014 at 12:22 pm

    The stats in this article are unsurprising; we are living in an increasingly digital age and advertising spend is of course reflecting this. However, advertisers can often focus on how they can increase the overall number of consumers reached by an advertising campaign rather than how to target the right type of consumer.

    And with online conversion rates remaining as low as 2-3%, compared to in store rates of 20%+, I would argue that online advertising strategies need to get even more creative and targeted if brands are to achieve the one to one engagement and return on investment (ROI) they will be hoping for from this additional spend.

    Consumers want to be understood, but in order to do this, advertisers must start looking beyond solely using demographic and transactional information to identify which consumers to target and start to also understand who is actually buying the products and – crucially – why.

    By understanding different consumers’ personality drivers and the motivations behind their purchases, advertising teams can gain better insight into the right channels and the right messages for the right audience. It also allows them to prioritise and focus their advertising activity and spend on those activities that are going to deliver maximum value to the brand.

    Surely the crux for any advertising campaign?

    Jon Hewson,
    Sales Director, VisualDNA

  • VisualDNA 5 Nov 2014 at 12:29 pm

    The stats in this article are unsurprising; we are living in an increasingly digital age and advertising spend is of course reflecting this. However, advertisers can often focus on how they can increase the overall number of consumers reached by an advertising campaign rather than how to target the right type of consumer.

    And with online conversion rates remaining as low as 2-3%, compared to in store rates of 20%+, I would argue that online advertising strategies need to get even more creative and targeted if brands are to achieve the one to one engagement and return on investment (ROI) they will be hoping for from this additional spend.

    Consumers want to be understood, but in order to do this, advertisers must start looking beyond solely using demographic and transactional information to identify which consumers to target and start to also understand who is actually buying the products and – crucially – why.

    By understanding different consumers’ personality drivers and the motivations behind their purchases, advertising teams can gain better insight into the right channels and the right messages for the right audience. It also allows them to prioritise and focus their advertising activity and spend on those activities that are going to deliver maximum value to the brand.

    Surely the crux for any advertising campaign?

    Jon Hewson, Sales Director, VisualDNA

  • VisualDNA 5 Nov 2014 at 5:08 pm

    The stats in this article are unsurprising; we are living in an increasingly digital age and advertising spend is of course reflecting this. However, advertisers can often focus on how they can increase the overall number of consumers reached by an advertising campaign rather than how to target the right type of consumer.

    And with online conversion rates remaining as low as 2-3%, compared to in store rates of 20%+, I would argue that online advertising strategies need to get even more creative and targeted if brands are to achieve the one to one engagement and return on investment (ROI) they will be hoping for from this additional spend.

    Consumers want to be understood, but in order to do this, advertisers must start looking beyond solely using demographic and transactional information to identify which consumers to target and start to also understand who is actually buying the products and – crucially – why.

    By understanding different consumers’ personality drivers and the motivations behind their purchases, advertising teams can gain better insight into the right channels and the right messages for the right audience. It also allows them to prioritise and focus their advertising activity and spend on those activities that are going to deliver maximum value to the brand.

    Surely the crux for any advertising campaign?

    Jon Hewson, Sales Director, VisualDNA

  • Post a comment

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