U.K. Marketers Rocket Digital Ad Budgets

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U.K. marketers will increase spending by 14% to $8.8 billion for online and mobile campaigns this year, up to $10.7 billion in 2014, and $12.4 billion in 2016, according to an eMarketer digital advertising report released Monday. 

Comparing U.K. with U.S. budgets, marketers in the United States will spend $166 billion, up to $189 billion in 2016, according to the research firm.

Paid search will continue to account for more than half of digital ad spending for marketers, as mobile search volume rises. Marketers will spend 15.3% more in 2012 on paid-search ads -- reaching $5.2 billion, or 58.5%, of all U.K. digital spending. Within four years the dollar amount will rise to $7.1 billion, but market share will slip to 57.1%.

Estimates for paid search released Monday rose a bit since eMarketer's May 2012 forecast, to a compound annual growth rate of 9.7% on paid-search spending between 2011 and 2016, rather than 8.5% as estimated in May. The revision prompted by greater-than-anticipated search spending in the first half of the year, as reported by the Interactive Advertising Bureau U.K.

This year, about $2.0 billion or 23% of all U.K. digital ad spending will go to display advertising such as banners, rich media, video and sponsorships. eMarketer estimates. The steady gains, in part, will come from an increase in use of real-time bidding and video formats, although doubts about the speed of economic recovery will lead some advertisers to focus on proven search tactics.

Online video ads in the U.K. should rise from $273 million in 2012 to about $1.4 billion in 2016, according to eMarketer. The estimates include social video and video advertising on mobile devices.

Mobile advertising will grow 120% in 2012, as spending on mobile platforms reaches $721 million. In 2016, mobile ad spending is expected to reach roughly $3.5 billion. Nearly 83% of all residents will be mobile phone users this year in the U.K., the world’s third-largest market for mobile advertising, and more than one-third of those will have a smartphone, according to eMarketer.

In 2012, only the U.S. and Japan, with projected mobile ad spending of $2.4 billion and $1.7 billion, respectively, will outrank the U.K.’s $721 million market share. The annual rate of growth, estimated at 120% for 2012, is expected to remain above 50% until 2016, when mobile ad spending in the U.K. will approach $3.5 billion, according to eMarketer.

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