In this week's Guest Member Blog Post, we hear from Tristan Veale, Insight Manager, IAB UK, as he shares the top 5 insights you need to know from IAB UK's latest Digital Adspend Report.
The UK’s digital ad market grew by 13% last year, hitting £35.5bn, according to IAB UK’s Digital Adspend report for 2024. It’s a big number and one that shows advertisers are continuing to prioritise online channels as they seek to reach, engage and motivate consumers. But what are the juicy stats behind that total? And what do they tell us about how the digital ad market is maturing? These are the five things to know…
1. AI-driven Search is maintaining its market share
Search continues to be the single largest channel in the digital ad market – accounting for 47% of total spend in 2024 – but this isn’t a story of just staying put. Search grew 13% year-on-year and has continued to innovate, with AI driven improvements increasing the channel's functionality and helping it maintain market share. However, the biggest reason Search has grown in line with the market average is search shopping ads – the ability to create a seamless shopping experience where consumers can act on impulse is paying dividends.
2. Older people are tuning into social & spend reflects that growth
Spend on social channels is a major driver of growth across the UK’s digital ad market. Social display spend grew 20% in 2024, with social video accounting for the lion’s share of that. Advertisers, essentially, are following eyeballs and harnessing highly engaging formats to achieve cut-through. It’s significant to note that the increase in spend we’re seeing correlates with an increase in time spent. Over the last five years, the average UK citizen has increased the time they spend on social media to the tune of 30 minutes per day. Cumulatively, that’s equivalent to 3,000 years more time being spent on social media in 2024 vs 2019. i.e. A LOT. Interestingly, 45-55 year olds are the main drivers of this, with this age group’s time spent on socials up by 40 minutes a day.
When it comes to where social spend is going, Guideline data gives us insight into which categories agencies invested most prominently in last year - computers and software, clothing, and beauty / grooming products accounted for a third of collective agency investment in social advertising last year.
3. Digital retail media was the strongest growing channel in 2024
The UK’s digital retail media market grew by 23% in 2024, across on and offsite formats. We expect this trend to continue, as advertisers seek out the data-rich, contextually relevant solutions offered by retailers – by 2027 we forecast that retail media will account for 7% of the total digital ad market, vs 4% today. And, as our new study Futurescape details, retail media is on course to become increasingly integrated into advertisers’ strategies over the coming years - moving from a bottom of the funnel focus to become a driver of brand building too.
4. The UK’s gaming ad market surpasses £1bn in spend
It’s long been called an emerging channel but those days are officially over - gaming has emerged and advertisers spent £1.1bn on the channel in 2024. This accounts for ads placed into the gameplay itself, as well as around the game, such as interstitials, reward ads and playable ads. According to Futurescape, the gaming market will continue to gain momentum, with an average 7% growth rate every year between now and 2030. So there’s lots to play for!
5. We expect £10bn of incremental digital ad spend by 2027
The digital ad market will continue to grow over the next few years, with Adspend predicting £10bn of incremental ad spend between 2023 and 2027. However, the maturing nature of the market, coupled with current economic uncertainty surrounding tariffs, means that growth is likely to slow somewhat - with an annual year-on-year growth rate of 5% by 2027. By this point, digital video’s share of the market will have grown to 27% vs 23% today, but Search will still be the dominant player - driven by the rise of AI and the growth of retail media.
If you’re an IAB UK member, you can access the full Digital Adspend report here.
