Digital adspend surges 41% to record high in 2021 – IAB

digital adspend report iab - orig image by Rudy and Peter Skitterians from Pixabay

The digital advertising market saw its biggest full year growth for 15 years last year, with adspend investment up 41% year-on-year to £23.5 billion.

That’s according to the full year Digital Adspend report for 2021 from industry body the IAB.  

IAB Adspend report

The report, which is conducted with PwC, shows that 2021 spend was also up 50% on 2019, the last full year in which the pandemic did not have an impact on activity.

With the market having seen modest growth in 2020, the latest results show that advertisers’ confidence rebounded in 2021 – a year which started with a full lockdown and ended with work-from-home advice reissued. 

The report noted that Search attracted the largest share of overall spend, up 38% to £11.7 billion. For the first time, Digital Adspend has captured advertisers’ investment in search shopping ads, which totalled £3.5 billion in 2021 – reflecting the blossoming ecommerce market.

It also showed that Spend on display ads was up 53% to £9.7 billion, with both social and non-social display up by more than 50%.

Video continued to drive the majority of display growth, up 58% to £5.5 billion. 

Spend on banner ads surged by 60%, suggesting that advertisers are reevaluating the value of standard display formats  as part of their campaigns.

Significantly, this year’s results reveal that digital ad spend grew across the board with the total market up 33% excluding the industry’s five largest companies.

Mobile accounted for 60% of total spend, up 43% year-on-year to £14.13 billion.

Podcast investment was up 61% year-on-year to £54 million, while digital audio’s annual growth rate multiplied from 17% in 2020 to 58% in 2021.

And static and dynamic in-game advertising totalled £9.8 million, as advertisers tapped into the opportunities to reach engaged and diverse audiences

Commenting on the results, Jon Mew, CEO of IAB UK, said: “After a 5% rise in digital ad spend in 2020, we were confident that 2021’s results would be much stronger, but for the market to be up 50% on pre-pandemic spend is incredible and testament to the resilience of our world-leading industry. 

“It’s particularly exciting to see emerging formats such as in-game advertising and podcasts continue to gather pace and offer new, untapped opportunities for growth.

“However, we shouldn’t lose sight of the fact that 2021 still wasn’t a normal year. 

“We spent half of it in some form of lockdown – bringing with it an increased reliance on digital channels – while the return of large-scale events such as the Olympics and Paralympics in H2 will also have impacted spend.

“Ultimately, while growth on this scale is truly brilliant to see, what matters most is how we sustain investment in the long-term, beyond recovery and in the face of growing regulatory scrutiny. 

“As an industry, we should take confidence from the results announced today and channel that into pulling together to ensure a sustainable future for digital advertising.”