Mobile ad spend hits £1bn but advertisers warned to avoid low quality ads

Mobile ad spend broke the £1bn barrier in the UK in the first half of the year – the first time it has passed the milestone in a six-month period – but concerns still remain over the quality of ads and the impact that could have on brand perceptions, according to the latest AA/Warc findings.

The report found that mobile ad budgets grew by 52.1% year on year between January and the end of June to £1.079bn. The UK has the highest spend on mobile in Europe and the third highest globally, after the US and China.

Both search and display advertising are growingly strongly on mobile – with search up 32.5% to £557m and display rising by 64.6% to £512m. And for the period, Warc is predicting that display spend will be higher than search for only the second time ever and will lead the way in future as brands increasingly invest in video.

James McDonald, research analyst at Warc, told Marketing Week that the growth is the result of advertisers increasingly looking to reach the ‘always-on’ consumer. Brands are using mobile as a supporting channel – often to amplify a TV campaign and target consumers more directly.

However he warns that publishers must be wary of rushing to mobile and not paying enough attention to the consumer experience. He believes the industry needs to double down on efforts to make “less intrusive, smarter and more relevant display ads” or turn to more native content.

“There is plenty of anecdotal evidence suggesting websites are at times becoming unusable due to the high amount of adverts placed on the page and this is particularly important for mobile as users are often bound by their data plans, meaning consumers are literally paying the price for ill thought advertising,” explains McDonald.

“The animosity this can create is not just damaging to the brand and the publisher, but also to the perception of ad land at large.”

TV advertising a bright spot

Ad spend growth in the UK continues to be driven by digital, with internet spend in the first half up 13.3% to £3.975bn. However more traditional ad formats also saw growth, with TV in particular performing well despite difficult comparisons with last year, when the FIFA World Cup boosted spend.

The AA/Warc report found that TV spend was up 7.1% year on year and revised its forecast for the full year up, again to 7.1%. McDonald says growth has been strong across financial services, food and cosmetics brands, while spend on VoD and sponsorship is steadily rising, in part because advertisers feel they understand how TV works for them.

“Brands have a stronger, proven understanding of how well TV advertising works for them than perhaps with online display or social right now,” he explains.

Radio saw a rise of 2.9%, while out of home was up 2.3%, cinema up 2.7% and direct mail increased by 4.5%.

News and magazine brands were the only sectors to see a decline in spend as sectors including financial services, food and motor pulled back spend.

The overall market increased by 5.8% to a record high of £9.424bn in the first half of the year. AA and Warc are now forecasting that ad spend will break the £20bn barrier in 2016.

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