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Forecasted ad spend in 2017: Where are marketers spending their budget?

by Robbie Jones on 05-Apr-2017 09:37:20

Forecasted ad spend in 2017

For the fourth consecutive year, marketers will have a bigger budget to play with in 2017, according to Marketing Week. Amidst the investment in digital marketing and events, the research revealed that marketers had increased their ad spend budget on average by 2.1% compared to last year.

But, just what are marketers spending this increased advertising budget on? We've delved deep into the latest statistics and reports to find out...

Internet ad spend rules

This will be the first year in which more money will be spent on internet advertising globally, than advertising on traditional television (which will total $192bn).

Internet advertising expenditure will grow 13% to $205bn (£164bn) in 2017, according to research from The Publicis Groupe, with internet accounting for 36.9% of all advertising expenditure, up from 34.0% in 2016.

In the UK, total ad spend is forecast to increase 3.2% in 2017 according to the Advertising Association with "internet spend" accounting for almost 50% of the market. Here's a breakdown of the spend by advertising medium.

Internet

  • Spend in 2016: £9,957m
  • % of market: 47%
  • 2017 forecast: +9.5%

TV*

  • Spend in 2016: £5,353m
  • % of market: 25%
  • 2017 forecast: +1.6%

Direct mail

  • Spend in 2016: £1,714m
  • % of market: 8.1%
  • 2017 forecast: -7.8%

Out of home*

  • Spend in 2016: £1,111m
  • % of market: 5.2%
  • 2017 forecast: +5.0%

National newspapers*

  • Spend in 2016: £1,102m
  • % of market: 5.1%
  • 2017 forecast: -7.9%

Regional newsbrands*

  • Spend in 2016: £1,036m
  • % of market: 4.8%
  • 2017 forecast: -8.6%

Magazine brands*

  • Spend in 2016: £885m
  • % of market: 4.2%
  • 2017 forecast: -6.0%

Radio*

  • Spend in 2016: £637m
  • % of market: 3.0%
  • 2017 forecast: +2.1%

Cinema

  • Spend in 2016: £262m
  • % of market: 1.2%
  • 2017 forecast: +2.4%

*Includes digital spend of the respected advertising medium.

While traditional advertising mediums, such as direct mail and newspapers, are still holding a sizeable share of the market, it is no surprise to see the internet top of the charts - considering the amount of people that now use the internet - and the ROI it can provide compared to other advertising techniques.

Breakdown of "internet" spend

Internet spend encompasses many different advertising mediums too, but recent research by the Internet Advertising Bureau UK has shed further light on this spending, and the types of advertising favoured by marketers the most.

Video

Spend on video ads grew by 67% to £474m in the first half of 2016 alone. Driven by rising video, TV and film viewing on smartphone, mobile spend grew by 129% - showing a considerable shift in budget by device.

'Oustream' and 'in-read video' ads saw a rise of 440% and now account for 40% of video spend online. Traditional ads, played before, during or after another video, grew by 17%.

Social media

Ad spend on social media sites grew 43% to £745m, meaning nearly half (48%) of display spend now goes on social. Social media spend on mobile alone grew 64%, so mobile now accounts for 80% of spend allocated to social. Facebook and Instagram are leading the way in this medium.

Content/native

Content and native advertising spend – which includes ‘advertorials’, and ads in social media news feeds – increased 29% to £451m.

Display advertising

Consumer goods brands – such as food, toiletries and clothing – spent the most on display ads, for example, banners and videos on third party websites, responsible for 18.3% of spend on the medium - followed by travel & transport (16.4%) and automotive (11.7%).

Search advertising

Driven by mobile, which grew 61%, paid-for search (PPC) overall grew 18.1% to £2.49bn – a 52% share of digital ad spend. Classifieds, including recruitment, property and automotive listings, grew 3.6% to £699 million (15% share).

What does success look like?

No matter what type of advertising medium that you are looking to take, you need to ask yourself, "What does success look like?"

Is it a high return-on-investment? Or, is it to raise brand awareness? Whatever you're trying to achieve, remember to keep your target market in mind and ensure they get exposed to your advertising campaign.

Internet advertising has helped in that respect, offering audience segmentation to deliver your message to an active and interested audience. Never rule out the role that more traditional advertising mediums can play, though.

Ten-years-ago, radio, as a platform, seemed to be wading towards extinction. Now in 2017, the industry expects to increase ad spend and grow at a time when we can listen to our favourite podcasts and music whenever we like.

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This post was written by Robbie Jones

Robbie is Marketing Lead at Katapult, here to devise brilliant marketing campaigns for clients, while telling terrible puns in the office.

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