‘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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