The UK's digital advertising landscape has evolved in recent years with the rise in online searches. It has led digital advertisers to leverage online marketing platforms, social media platforms, etc., to run paid ads. Among the pioneers of digital advertising, in 2022, the UK accounted for 77.2% of the total ad market - the second highest share worldwide, China being the first. Not only that, to state the importance of a rise in ad spending, it rose from 76.6% to 77.2% in 2022, when the Coronavirus pandemic had hit other sectors very hard. This highlights the profound impact of UK advertising spend and the role that advertising agencies played during this period. As per the report from Emarketer, the UK ad spend in 2023 is expected to decline to 4.9%. However, despite a gloomy economy and recession in the market, the UK ad industry is expected to grow and rise in the years ahead. Let us discuss ahead in the blog the forecast of UK ad spending and how advertising agencies can be proactive in adapting to new marketing trends and maximize the return on ad spend in the upcoming years. You can also read our blog on Digital ad spending forecast for the US market in 2023 to know more about ad spending in
With the launch of Google Ads in 2000, countries like the UK and the US started using the online platform to get in touch with the target audience. Since then, in the UK, online advertising has taken a boom and both advertisers as well as users have started using online marketing. The UK advertising industry is one of the most competitive markets in the world. With the increase in social media platforms, more users are switching to online platforms for the products or services they are looking for. This helps them target the users based on their search intent and work on ad personalization to increase the chances of the users clicking on the ad.
The UK digital ad spending dominates worldwide, accounting for 77.2% of the entire media market. This accounts for the second-highest market share, only behind China. Despite the looming recession among the different sectors in the UK market, the digital advertising market is expected to rise. Digital marketing during the times of the Coronavirus gave a boost to online marketing as most of the users were packed in the house.
With the image below from Emarketer, it can be seen that digital ad spending has increased compared to the previous year. The percentage of digital ad spend has decreased as no sharp change in the amount spent on digital spending can be observed. However, in terms of revenue, this amount is expected to grow from £25.84 billion to £28.37 billion. The UK advertising agencies can work on a plan & strategy using this stat and maximize their advertising ROI.
What to expect for the UK digital ad spending in 2023 and beyond?
The UK advertising industry aims to grow more in terms of revenue in 2023 and beyond. With the ongoing market recession, almost all industries have been hit hard, which has led to a decline in advertising spend. With layoffs in jobs, loss in core business revenue, etc., the recession has hit hard in the advertising industry.
As per a report from Emarketer for 2022, digital ad spending for the UK market was expected to rise in terms of revenue. The graph below shows that it was expected to reach £25.84 billion. However, the total media spend was expected to grow from the previous years.
Change in forecast
The good news is that the UK advertising market is expected to grow in the upcoming years as per the Emarketer forecast. Amidst the political unrest, the ongoing war between Russia & Ukraine, etc., the UK advertising forecast has changed. It is anticipated to go down in 2023, as many industries have refrained from running ads as they used to.
UK advertising agencies continually keep a close look at these stats and the ongoing scenarios to help their clients meet the desired advertising goals. The image below from Emarketer for the forecast for the UK market shows that there would be a decline from 8.8% ad spend to 4.9% ad spend in 2023. This is, however, expected to grow and rise 7.8% in the year 2027. To maximize the results from your ad budget and complete campaign analysis, you can outsource PPC to India and hire PPC specialists from a PPC agency to optimize the performance of your ad campaigns.
Whether you are running local service ads, e-commerce PPC ads, search ads, video ads, mobile ads etc., you must ensure that these ads align with the latest digital marketing trends. It helps gain users' trust in your business and choose your brand name when looking for your products or services.
Key digital ad market drivers in UK
1. Mobile advertising - The mobile advertising world is dominating the online marketing world. With the increase in internet availability, the number of users using mobile devices globally has increased and the United Kingdom is no exception to this. The UK mobile advertising plays a crucial role in the country's advertising budget as most users use mobile devices when looking for burying products, availing of services, etc. So, you cannot miss out on the opportunity to optimize your website for mobile devices.
When running paid ad campaigns, your ads must grab the users' attention by making clicks on the PPC ad. You need to ensure that your ads have engaging content and that the ad extensions are properly placed so that the user has an idea of what they are going to get after clicking on the ad.
As online marketing is different from traditional marketing, it also presents the most impatient users before you. Nearly 53% of users abandon a mobile website if it takes more than 3 seconds to display the results. If the users, after clicking on the PPC ad, do not reach the landing page due to the page taking too long, the load impacts negatively. Not only do you have to pay the online platforms for the click on the ad, but it also adversely affects your brand awareness. So, it is essential that you work on optimizing the page loading speed, thus increasing the chances of the visitors getting converted to customers.
The data from the image above presents the mobile ad spending in the year 2021. The data highlights mobile ad spending across different industries like retail, consumer packaged goods, computing products and consumer electronics, financial services, etc. The % of digital ad spending across these sectors can be seen to be covering almost 3/4th through mobile advertising. So, it presents the fact that it is a key digital ad spending driver in the market. So, whether you are running paid ad campaigns on the search engines like Google Ads, Bing Ads, etc. or on the social media platforms like Facebook remarketing, Instagram Ads, YouTube Ads, etc., you need to ensure that your ads are optimized for mobile devices so that the target audience can get in touch with your 24/7.
2. Video advertising - Videos help convey messages to the target audience easily and quickly. As per the forecast from Emarketer, the estimated video advertising for 2022 was expected to go down to 12.4% from 13.3% in 2021. However, this data has gone down due to many reasons like recession, global pandemic, etc. Advertisers are still spending a lot on video advertising, and it is expected to increase in the upcoming years.
There are myths regarding PPC advertising that you need to have a good amount of advertising budget; only high-traffic relevant keywords increase traffic, etc. However, this may not be true, as a proper PPC management strategy can achieve the desired advertising goals.
The UK video advertising industry is essential to focus on by advertisers that are willing to run ad campaigns in this geographical location. You can focus on conducting PPC keyword research to determine the primary and secondary keywords on which your paid ads appear to the relevant users. With the increase in the number of advertisers and targeting the keywords as yours, you must ensure that your video ads have a higher rank & position so that the impression share for your ads increases. When more users see your ads, there are high chance that the users click on the ad. You need to ensure that you have optimized landing pages so that the users navigate through different sections on the website and take the desired action, ultimately increasing the conversion rate.
3. Social media advertising - Social media marketing is the buzzword in the online marketing world today and advertisers targeting the UK to run paid ads need to focus on this. The number of users on social media platforms is increasing, and it thus becomes vital to run paid ad campaigns on these platforms to increase visitors to the page.
Multiple social media platforms are operating in the United Kingdom. Running paid ad campaigns on popular platforms like Facebook Ads, YouTube Ads, LinkedIn Ads, etc., becomes vital. You can even run paid ads on platforms like Snapchat, TikTok, etc., as these are popular in the United Kingdom. The report from Emarketer forecasts an increase in the number of users of all Gen Z social network users. The largest social media platform Facebook shows that the number of users is expected to increase in the upcoming years. So, this clearly highlights the importance of why social media advertising needs to be focused on when advertising in the UK market.
The goals of different businesses vary, like lead generation, building brand awareness, form fill-ups, etc. Social media has users of all ages, and targeting the relevant audience is essential. So, you need to focus on audience segmentation based on the users buying activity, the time they are active on social media, etc. It would help the users to see the ads at the relevant time. You can also focus on ad scheduling so that your ad appears to the maximum number of prospect customers.
4. Programmatic advertising - Programmatic advertising connects publishers and brands in milliseconds. Publishers use ad exchangers or SSPs to monetize their advertising inventory. As this type of advertising method works with almost all types of ad formats, it has a good UK advertising market share. It is becoming increasingly popular among advertisers as it focuses on targeting specific audiences. As this is based on artificial intelligence, all the bidding work is done in milliseconds.
According to a report from Insider Intelligence, In 2021, programmatic ad spending in the UK reached £7.90 billion. So, in the upcoming year, it is expected to have a rise as it helps save time. As in Google Ads or Bing Ads, you have the option to perform automated bidding; similarly, with programmatic advertising, you can set a bid amount and when this matches the ad is displayed to the audiences.
As in Google Display Network, you have the opportunity to display ads across different networks so that the relevant audience clicks on the ad. Similarly, this advantage can be achieved with programmatic advertising. Buying ad placements used to be a tedious process. You had to buy impressions from publishers and perform negotiations to place ads. The core point is that a huge amount of money was needed to achieve this space. However, with the rise of programmatic advertising, you can now leverage the power of machine learning and artificial intelligence that helps to buy ad space in real-time. As in Google Display Network, you have the opportunity to display ads across different networks so that the relevant audience clicks on the ad. With the increase in technology, even tech giant Facebook has switched to Metaverse leveraging virtual reality. So, this method of advertising is increasing in the UK advertising world.
Industry wise
The United Kingdom digital advertising industry spends millions of amount in running paid ads. With such a wide range of audiences, it becomes essential to focus on audience segmentation to grab the users' attention with a high chance of taking the desired action on the landing page. The UK advertising agencies work on a plan & strategy that helps their clients meet the desired advertising goals. The Uk’s advertising agency grew during the global pandemic and experienced a rise in revenue.
The goals of different sectors vary and the PPC specialists work accordingly to increase the conversion rate. You can outsource PPC to India and get in touch with the PPC experts that work with global clients and have industry-oriented knowledge to help clients achieve their desired goals. The PPC experts prepare a PPC report to track the performance of essential PPC metrics. As the goals of businesses vary, different PPC metrics are essential for different businesses. So, the focus needs to be put on these metrics first. With the help of a PPC audit, you can have a data-driven PPC report. Analyzing the report, you can take the necessary steps to optimize the performance of the PPC ad campaign. This may include making changes in the ad groups and ad copies, performing keyword research to choose high-traffic relevant keywords, etc.
The image above points out that the retail sector alone is expected to have digital ad spend of £5.12 billion other second to combined of all other industries, which is expected to be £5.60 billion. Other industries like consumer packaged goods(CPG), computing products and consumer electronics, financial services, automotive and travel also have billions to be spent on digital ads. So, the UK advertising agencies need to closely monitor the UK advertising market to have a clear idea of when to run which ad types like search ads, video ads, mobile ads, display ads, holiday ads, etc.
Having a complete knowledge of running ads dedicated to a specific industry is vital as it helps to maximize the return on ad spend. It helps streamline the process of creating ad copies, ad groups, writing headlines, etc., to achieve the desired results. This is where it becomes crucial to get the work done by the PPC professionals. You can outsource PPC services to India and hire PPC experts, as they have years of experience running paid ads from different industries.
Digital advertising challenges in UK
1. Customer centric market - The main challenge with digital marketing agencies when advertising in the UK market is that it requires a customer-centric approach. It is not an easy task to perform as the user behavior keeps changing. So, as in search engine optimization, you focus on analyzing the type of content users searched for in the market and then take the necessary steps to optimize the SEO campaign performance. In the same way, you need to perform market research to determine what type of keywords or search terms users enter that your business deals with. It helps to write unique content, update old content (if any), have engaging call to action, etc., to increase clicks on the ad and generate traffic on the landing page.
2. Omnichannel marketing strategies - Today, users are present on search engines, social media platforms and various other online platforms. It thus becomes essential to have an omnichannel marketing strategy so that the potential customers reach the landing page and take the intended action. The core point here is that it does not only require running ads on these platforms but also requires concentrating on ad personalization to increase engagement.
It thus becomes a tough task to execute as you need to harness effective strategies to achieve the desired goals. With the help of omnichannel marketing, you build brand awareness and help in peer-to-peer marketing. Running ads on multiple platforms requires an ad budget and not all businesses would be able to spend such an amount. So, it becomes essential to have qualified PPC professionals to run these ads. You can outsource PPC services so that the PPC experts handle the ads for multiple platforms. Today, leveraging more than one single platform in the marketing strategy is becoming the need of the hour for businesses. The research from HubSpot shows that 92% of marketers leverage more than one channel. In 2022, 81% of marketers used more than one channel. In 2023 and the years ahead, it is even expected to grow.
3. Marketing trends - Multiple digital marketing trends keep evolving with time. It is thus essential for advertisers to keep in touch with these trends so that the users are provided with all the essential benefits and helps you to stay ahead of the competitors. Including these PPC trends in your PPC advertising strategy helps you grab users' attention, increasing their chances of clicking on the ad. As in search engine optimization, you focus on SEO trends; in e-commerce, you focus on e-commerce trends, etc., to ensure that the users engage with the business. In the same way, including these PPC trends in your ads helps to achieve a better ad rank & position.
4. Global pandemic - The next challenge with advertising in the UK is the effect of a global pandemic. Although the UK had a surge in terms of digital marketing when the Coronavirus pandemic hit the country, the advertising industry was hit hard in the early days. As these pandemics can arise at any time, it becomes a challenge to make sudden changes in the advertising strategy during this pandemic. As the PPC ads require paying an amount to online platforms for every click on the ad, it becomes essential for advertisers to be on their toes so that they do end up on the wrong side and the budget gets wasted on irrelevant clicks.
Scope of digital advertising: what's in store?
Digital advertising has been widespread in the UK online marketing world. It is widely adopted among users and advertisers have seen a great increase in the number of businesses choosing to run paid ads. However, as discussed ahead, the UK advertising spend is expected to go down in 2023; there are bright days ahead. There are many things in store for paid ads that keep evolving with the latest trends. Like, performance max campaigns are taking over shopping ads and are in demand among UK advertisers for their multiple benefits. You need to track user behavior and plan strategies to maximize the returns from these ads. You just need to grapple the challenges like cross-border wars, pandemics, etc., as the effect of these challenges subsides with time.
Final thoughts
The UK advertising market is highly competitive and online advertisers always have an eye on the latest marketing trends to include in their PPC ad campaigns. Thus, It is essential to examine the updates by Google or other online platforms closely. E.g., the updates on Google expanded text ads, the launch of performance max campaigns, etc. The better the knowledge of these updates, the better the chances of achieving the desired time. It also helps save time and make informed decisions to optimize the ad campaigns accordingly.
The report from Emarketer suggests that ad spending for 2023 is estimated to go down. However, it is expected to grow to a new amount in the upcoming years. Digital advertisers looking to maximize their ad revenue amidst any situation must focus on the performance of essential PPC metrics and optimize them. You can also outsource PPC services to a white label digital marketing company so that the PPC experts can manage the multiple ad formats like search ads, video ads, mobile ads, etc., and provide a complete PPC campaign analysis and achieve the advertising goals.
References:
• How marketers are spending their money in 2023 (we asked 8032 marketers)
• UK digital ad spending by industry