We are still at the start of a huge boom in mobile advertising
A view from Ian Maude

We are still at the start of a huge boom in mobile advertising

More than half of UK adspend has finally moved online but the shift to mobile has only just got started.

The latest numbers from IAB UK and Warc show that the internet now accounts for more than half of UK advertising excluding direct mail, making ours the first major Western economy to reach this milestone.

In the first half of the year, online advertising grew 16% year on year to £4.8bn, equal to about 52% of the overall ad market, up circa four percentage points on the same period in 2015 and on track to exceed £10bn this year.

While these numbers predate the vote for Brexit, only digital advertising continues to show structural growth.

The growth engine is mobile advertising which jumped 53% year-on-year to £1.7bn, split between search and display, accounting for virtually all of the hike in online adspend and vast majority of the increase in spend across all media.

There is much more growth to come. Mobile phones and tablets account for a third of online advertising but about 60% of time online. As brands and marketers improve their ability to reach, engage and monetise mobile audiences so spend will continue to migrate to our pocket supercomputers.

Some of this will be at the expense of desktop advertising, which was essentially flat in H1. But much will come from traditional media especially print advertising, which is projected to fall as much as a fifth in the next two years.

On its current track mobile advertising should overtake spend on broadcast TV ads next year.

Retail is both a beneficiary and a driver of the shift to mobile marketing. Smartphones and tablets now generate over half of all online transactions and according to a recent survey for the IAB over one-third of all purchases made by mobile users with 40% buying something on their phones at least once a week.

For most people convenience and saving time, rather than price, are the key benefits. Another survey for Criteo found that one-third of Brits have bought something while watching TV and a fifth while in bed at night.

Google and Facebook are focusing on the mobile user experience and Google has announced plans to create a separate mobile web index, which will be the primary index for its search engine.

Mobile connectivity is already transforming entire industries and this will accelerate with the arrival of 5G networks in 2020, delivering connection speeds of up to 10 Gbps, enabling new services such as virtual reality, autonomous driving and many more.

More and more organisations are investing heavily in dedicated mobile websites and applications and ensuring ad campaigns are optimised for smartphones and tablets.

This is just the beginning. Even as we move to a hyper connected world the smartphone will continue to be the central device in our lives. 

Increasingly, the future is mobile.

Ian Maude is group developement director at Be Heard Group and tweets at @ianmaude