UK Ad Spend Growth Forecast Cut to 3.7%; Ad Viewability in UK Rises Above 50%

ExchangeWire Research’s weekly roundup brings you up-to-date research findings from around the world, with additional insight provided by Rebecca Muir, ExchangeWire, head of research and analysis. In this week’s edition: 30% losses in the mobile ad market due to lack of ad transparency; UK digital video viewing still significantly less than TV; UK ad spend growth forecast cut to 3.7%; Ad viewability in UK rises above 50%.

Lack of transparency responsible for losses in mobile advertising

Advertisers are losing billions of US dollars due to a lack of ad transparency; that is the conclusion of a global study conducted by S4M. The study analysed ad units separated into two formats: HTML 5 and static.

According to the study, HTML 5 ads suffer from viewability issues, resulting in 20% of all HTML 5 ads not being seen by users, or being closed before the display starts. The biggest problem for static ads, on the other hand, is brand safety, as almost 40% of ads appear in unfavourable contexts.

Wrong display environments are an issue encountered by 8% of both ad formats in terms of device-targeting. In the case of static ads, the dissemination of ads in wrong contexts is also down to the fact that static ads are often performance-based, the study concluded.

S4M puts the losses in the mobile ad market due to the lack of ad transparency at a staggering 30%.

TV still trumps UK digital video exposure

A study among more than 13,500 consumers in 42 countries finds that video viewing time on digital screens is now on par with time spent watching TV – except in the UK. The time spent watching TV, including on-demand services, amounts to 62% of total video viewing time, leaving only 38% for viewing on digital devices (laptop, tablet, and smartphone), the Millward Brown AdReaction study reveals.

In the UK, total viewing time on digital devices was 212 minutes/day, trumping the European average of 173 minutes. The global average is 204 minutes. Globally, half of this video viewing (102 minutes) is on TV, while the remaining half is split via mobile devices (45 minutes on smartphones, 20 minutes on tablet devices), and laptops or PCs (37 minutes).

However, TV remains the preferred video viewing platform in the UK due to the popularity of on-demand viewing. According to the study, UK consumers watch an average of 64 minutes of on-demand TV per day, a figure that is 28% higher than the global average.

In terms of advertising, the study finds consumer receptivity to digital video ads significantly lower in the UK than for TV, with 18% favourability for digital ads, and 27% for TV ads. Consumers are most receptive to video ads targeted based on their interests (38% in the UK) or preferred brands (40% in the UK) and least receptive to ads based on their web browsing history (21% in the UK). Ads that offer rewards and skippable ad formats are favoured by consumers in the UK.

“It is now possible to reach consumers at scale through multiple video channels, but simply applying the same thinking to each will make consumers skip or switch off. Consumers expect content to be bespoke to the context in which they watch it and receptivity to ads that fail to take this into account is extremely low,” comments Amanda Phillips, head of marketing at Millward Brown UK.

UK ad spend growth forecast cut to 3.7%

Despite continuing growth of marketing budgets, marketers are more cautious about how they spend, possibly due to the slowdown in some UK economic sectors, the Bellwether Report for Q3 2015 concludes.

Only 4.4% of companies report an increase in budget in Q3, significantly down from 12.2% in the previous quarter. The slow down in growth is also reflected in the wider industry financial prospects: 6.8% of companies said they felt less optimistic about financial prospects in general, as well as their own financial prospects (22.4%).

As an immediate effect, the forecast for ad spend growth in 2015 has been cut: Instead of a projected 4.2% growth, the survey now predicts ad spend growth of 3.7%.

However, the internet remains the top spot for marketing spend, with a growth of 7.8%, up one percentage point from 6.8% in Q2 2015. Elsewhere, marketing budgets have declined, i.e. PR (-5.8%) and market research (-4.7%) recorded the greatest falls, followed by sales promotion (-3.4%), direct marketing (-2.7%) and ‘other’ (-1.1%).

“Internet spend bucked the trend in terms of the broad-based slow-down in budget growth across most marketing channels quarter-on-quarter", says Paul Mead, founder & managing director, VCCP Media and chair of the IPA Search Group. "The 7.8% uplift demonstrates that online is perhaps the one ‘go to’ channel where continued focus and investment is required, almost regardless of the wider outlook.”

UK online ad viewability rises to 52%

UK online ads have become more viewable. According to Meetrics, 52% of ads shown in the UK in Q3 were viewable. In Q2, online ad viewability was at 49%. Both figures are still lower than in other European countries, with Germany reporting 61% viewability, and France 69%. In the UK, the average viewing time of viewable ads also rose from 29.5 seconds in Q2 to 31.2 seconds in Q3.

“Based on the IAB’s latest digital ad spend report, our data suggests about £260m was wasted in Q3 on unseen ads – equivalent to over £1bn a year”, says Anant Joshi, Meetrics’ director of international business. “The main reason ads aren’t viewable is they take too long to load – about 20% of ads served don’t load before a viewer has moved elsewhere. Consequently, the industry has much to do in terms of increasing web-page performance and ad serving systems; notably, to drastically reduce the amount of web browser redirects that go on behind the scenes before content is loaded.”

According to the report, ‘Half-page’ ads are the most viewable (72%) ad format, followed by ‘Billboards’ (67%). ‘Leaderboards’ are the least viewable (40%) format.