UK MOBILE

AD SPENDING
2014
On Course to Dent Desktop and
Topple TV as Leading Channel
SEPTEMBER 2014
Robert Andrews
Contributors: Jennifer Jhun, Natalie Marin-Sharp

Read this on
eMarketer for iPad

EXECUTIVE SUMMARY
Digital advertising executives used to make the
perennially hopeful proclamation that next year will
be the year of mobile. In the UK, not only has that
year already come to pass, but mobile advertising
momentum is now so strong that every year for the
foreseeable future looks to be dominated by it.
Encouraged by fast-growing smartphone adoption
that has created a direct, visually-rich and engaging
route to target audiences, UK mobile ad spending is
booming. Advertisers nearly doubled their total mobile ad
investment in 2013 and are expected to do so again this
year, with spending forecast to pass 2 billion (more than
$3 billion).
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Although this growth rate is expected to tail off in the next

few years, mobile will remain by far the fastest-growing
of all advertising media in the UK, taking more spending
than print in 2015 and surpassing even TV by 2016, when
it will become the single-biggest advertising channel in
the country.
Yet while mobile appears an effective device through
which to reach younger consumers in particular, questions
remain over its effectiveness relative to the channels it is
set to overtake. Advertisers should be assured of likely
returns before they invest blindly.

KEY QUESTIONS:

UK Mobile Ad Spending, 2012-2018

millions of and % change
6,907
158.9%
5,756
4,462
96.0%
3,233

96.0%
2,021

60.0%
1,031

38.0%

526
2012

2013

2014

Mobile ad spending

2015

2016

29.0%
2017

Note: includes display (sponsorship, standard display, video and other

display formats), search, and other (classified, mobile SMS/MMS, tenancies
and other); ad spending on tablets is included
Source: eMarketer, June 2014; confirmed and republished, Sep 2014
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CONTENTS
2 Executive Summary
3 Mobile Spending Trends
6 Mobile Spending Growth Drivers
7 Mobile Spending by Format
10 Digital Titans Rule Mobilewith Some Twists

What is driving UK mobile advertising growth?

14 Related eMarketer Reports

Which formats are performing best?

2018

% change

How much will UK advertisers spend on mobile

devices between 2014 and 2018?

20.0%

14 Conclusions
14 Related Links
15 Editorial and Production Contributors

What is mobiles place in the overall UK

marketing mix?

UK MOBILE AD SPENDING 2014: ON COURSE TO DENT DESKTOP AND TOPPLE TV AS LEADING CHANNEL

2014 EMARKETER INC. ALL RIGHTS RESERVED 2

MOBILE SPENDING TRENDS

With UK advertisers predicted to spend more than
2 billion ($3.16 billion) on mobile ads in 2014, this
channel is now a heavyweight platform in the throes
of a boom that will shift the center of gravity in
UK marketing.
eMarketer estimates that UK advertisers will invest
96.0% more on mobile in 2014 than in 2013. Already
responsible for the largest proportion of mobile ad
spending in Europe, the UK this year will become the
worlds second largest mobile ad market by share of
global spend.
By 2018, annual mobile ad spending in the UK will be
more than three times greater still, at nearly 6.91 billion
($10.79 billion), eMarketer expects. This level of growth
has not been seen since the early days of internet
advertising itself. Mobile advertising spend alone has now
reached the same volume that UK internet advertising
as a whole saw in 2006, according to data that year
from the Internet Advertising Bureau UK (IAB UK) and
PricewaterhouseCoopers (PwC).
UK Mobile Ad Spending, 2012-2018
millions of , % of total digital ad spending and % of total
media ad spending
6,907
5,756
4,462

70.4%
62.2%

3,233

3.9%
9.7%
526

7.3%
16.4%
1,031

2,021

51.6%

40.6%
33.7%

27.9%

39.1%

27.1%
20.5%

Furthermore, sharply rising mobile ad spending is

propelling overall UK digital ad investment to new heights.
UK mobile advertising is now forecast to grow six times
faster than overall digital ad spending (up 15.0%) in 2014.
The result will see digital increasingly reshaped as a
mobile world.
In 2016, mobile will become the UKs majority digital
ad channel, up from a 16.4% share in 2013. And it will
rise even further in subsequent years, representing an
astonishing 70.4% of all UK digital spending by 2018,
moving the country from an expected third place this
yearbehind South Korea and the USto first place
among countries analyzed by eMarketer for share of
digital spending dedicated to mobile devices.
Compared with other researchers, eMarketers mobile
ad spending forecast is highly optimistic. eMarketers
spending figure for 2014 is nearly 12% higher than the
next nearest estimate, and is more than 50% greater than
the lowest. Moreover, our 6.91 billion ($10.79 billion)
forecast for UK mobile ad spending in 2018 is more than
three times that of PwCs estimate.
There are several reasons for this. For one thing, mobile
adoption trends encourage an optimistic projection. We
estimate that in 2018, 85.0% of UK mobile phone users
will have a smartphone, and 72.0% of internet users will
have a tablet. In addition, our calculations indicate that
UK residents will spend more time with mobile devices
than with desktops or laptops in 2014. Advertisers will be
following consumers onto mobile platforms. Companylevel ad revenue figures point to very strong growth, too.
In Q2 2014, Facebooks worldwide mobile ad revenue
accounted for 62% of its global total ad revenues; for
Twitter, 81% of ad revenues derived from mobile.
All these trends point in the same direction: massive
increases in mobile ad spending, especially in a market
such as the UK, where mobile penetration is so high.

13.4%

2012

2013

2014

2015

Mobile ad spending
% of total digital ad spending

2016

2017

2018

% of total media ad spending

Note: includes display (sponsorship, standard display, video and other

display formats), search, and other (classified, mobile SMS/MMS, tenancies
and other); ad spending on tablets is included
Source: eMarketer, June 2014; confirmed and republished, Sep 2014
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Comparative Estimates: UK Mobile Ad Spending,

2013-2018
2013

2014

2015

2016

2017

2018

UK Digital Ad Spending, by Device and Format,

2013-2018
millions of
2013

Mobile ad spending (millions)

eMarketer, Sep 2014

$1.61

$3.16

$5.05

AA*, July 2014

$1.61

$2.83

$4.14

GroupM*, June 2014

$1.57

$2.50

$3.67

PwC, June 2014

$1.57

$2.09

$2.50

$2.86

$3.19

$3.46

IAB UK*, April 2014

$1.61

$6.97

$8.99 $10.79

Mobile ad spending growth (% change)

96.0% 96.0% 60.0% 38.0% 29.0%

AA, July 2014

95.2%

75.2%

46.6%

GroupM, June 2014

101.9%

59.4%

46.9%

PwC, June 2014

97.5%

32.9%

19.8%

IAB UK, April 2014

93.3%

14.5%

20.0%

11.5%

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2018

Display

1,429.6

1,549.8

1,309.6

1,191.5

1,029.6

854.9

Banners
and other (1)

1,174.1

1,122.2

852.8

709.0

547.6

376.9

Video
Other (2)

255.5

427.6

456.7

482.5

482.0

477.9

2,912.4

2,700.9

2,455.1

2,092.3

1,601.2

1,223.6

930.0

973.5

971.6

901.2

865.6

821.9

Display

432.4

949.8 1,519.6

2,007.8

2,532.5

2,970.0

Banners
and other (1)

363.0

727.5 1,099.3

1,338.6

1,554.1

1,726.7

Video
Search
www.eMarketer.com

Other (4)
Total

MOBILE WILL DOWNSIZE

DESKTOP INVESTMENT
Mobile advertisings expansion in the UK will not occur
in isolation. Ad spending growth on mobile devices will
displace and diminish the historically dominant channel of
desktop digital advertising.
eMarketer believes the UKs 5.27 billion ($8.23 billion)
in desktop digital ad spending in 2013 was the channels
spending peak. While mobile ad spending is forecast to
almost double in 2014, this year will also see the first
decline in UK spending on desktop ads.

2017

Mobile (3)

Note: *converted at the exchange rate of US$1=0.64

Source: eMarketer, Sep 2014; various, as noted, 2014
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8.4%

2015

5,269.0 5,224.2 4,736.3 4,185.1 3,496.4 2,900.4

Search

eMarketer, Sep 2014

2014

Desktop/
laptop

1,031.0 2,020.8 3,233.2 4,461.8 5,755.8 6,906.9

69.4

222.3

420.3

669.3

582.6 1,044.7

1,665.1

2,378.2

3,108.1

3,778.1

48.5

75.9

115.1

158.9

13.0

26.3

978.5 1,243.2

6,300.0 7,245.0 7,969.5 8,646.9 9,252.2 9,807.3

Note: numbers may not add up to total due to rounding; (1) banners, rich
media, sponsorships and other display formats; (2) classified, lead
generation and Solus email; (3) ad spending on tablets is included;
(4) classified, lead generation, mobile SMS/MMS and Solus email
Source: eMarketer, Sep 2014
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While the 2014 spending dip will be slightjust 0.8%

flagging desktop investment is expected to continue and
accelerate in the coming years. During 2018 alone, UK
advertisers will pare 17.0% of their desktop spending,
while nevertheless spending more than 20% on mobile,
eMarketer predicts. A significant tipping point will occur
in 2016, when UK mobile ad spending is expected to
surpass UK desktop ad spending for the first time.
eMarketer foresees the same trends on the same
timeline in the US, but with one slight difference in
emphasis. While the initial pace of displacement in the
UK will be slower than in the US, its acceleration will be
fasterin 2018, US desktop ad spending is expected to
shrink by just 10.4%, compared with the UKs 17.0% drop.
These predictions might make for shocking reading
among digital veterans who have only ever known
spending growth. But the nuances of this story
are intriguing.

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2014 EMARKETER INC. ALL RIGHTS RESERVED 4

Many marketers lately have begun wringing their hands

at the diminishing performance of desktop ads, notably
display banners, whose clickthrough rates (CTRs) fell
to a disappointing 0.07% of all impressions in the UK
at last count, according to Googles 2009 DoubleClick
Benchmarks report; performance since has likely
worsened. In this sense, marketers are welcoming the
emergence of new devices with new ad formats and new
prospects for heightened consumer engagement. Indeed,
eMarketers mobile spending forecast includes numbers
for devices and formats which simply did not exist a few
years ago, like tablets, Facebooks Sponsored Stories and
Twitters Promoted Tweets.
That is why the industry is not witnessing a simple
correlation between the growth in mobile and shrinkage
in desktop spending, or a straight desktop-to-mobile
transference. Despite the erosion of the desktop empire,
mobiles new growthincluding bringing new formats
that promise higher engagement and in return command
higher premiumswill go on, spurring overall digital
spending growth.

MOBILE AS DOMINANT
ADVERTISING CHANNEL
Mobile is not just surging to dominate UK digital ad
spending; it is also on course to become the most
powerful force in UK advertising across the board.
As a relatively young medium, mobile historically has not
commanded a great share of ad spending in the country.
But this is changing rapidly. Already, UK advertisers
are spending more in mobile than they are in radio or
magazines, eMarketer estimates. In addition, mobile
spending is expected to essentially match newspaper
spending in 2014. Next year, it will surpass all print
advertising combined.

UK Total Media Ad Spending, by Media, 2013-2018

millions of
2013

2014

2015

2016

2017

2018

Digital

6,300

7,245

7,970

8,647

9,252

9,807

Mobile

1,031

2,021

3,233

4,462

5,756

6,907

TV

3,618

3,712

3,768

3,813

3,851

2,529

Print

2,952

2,805

2,695

2,610

2,565

672

Newspapers*

2,167

2,059

1,977

1,913

1,883

1,856
1,117

Magazines*

785

746

718

696

682

Outdoor

990

1,024

1,050

1,076

1,098

335

Radio**

318

328

330

333

334

3,890

Total

14,178 15,114 15,812 16,479 17,100 17,678

Note: numbers may not add up to total due to rounding, *print only;
**excludes off-air radio & digital
Source: eMarketer, Sep 2014
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But an even more significant milestone is on the

horizon. In 2016, UK spending on mobile ads will surpass
spending on TV ads, eMarketer estimates. Two years
later, mobile will dominate the ad landscape, grabbing
39.1% of all spending. Taken together, desktop and
nondesktop digital channels will command the majority of
advertiser investment.
UK Total Media Ad Spending Share, by Media,
2013-2018
% of total and billions of
Digital
Mobile

2013

2014

2015

2016

2017

2018

44.4%

47.9%

50.4%

52.5%

54.1%

55.5%

7.3%

13.4%

20.4%

27.1%

33.7%

39.1%

TV

25.5%

24.6%

23.8%

23.1%

22.5%

22.0%

Print

20.8%

18.6%

17.0%

15.8%

15.0%

14.3%

Newspapers*

15.3%

13.6%

12.5%

11.6%

11.0%

10.5%

Magazines*

5.5%

4.9%

4.5%

4.2%

4.0%

3.8%

Outdoor

7.0%

6.8%

6.6%

6.5%

6.4%

6.3%

Radio**
Total

2.2%

2.2%

2.1%

2.0%

2.0%

1.9%

14.18

15.11

15.81

16.48

17.10

17.68

Note: numbers may not add up to 100% due to rounding, *print only;
**excludes off-air radio & digital
Source: eMarketer, Sep 2014
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The reasons for this changing of the guard are a tale of

rise and fall. Incumbent print media channels in particular
have been steadily losing advertising revenue, recording
annual ad spending declinesand will continue to do so,
even if at a slowing rate. After ups and downs in recent
years, TV and radio, by contrast, will both see consistent
but small gains between 2014 and 2018.

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2014 EMARKETER INC. ALL RIGHTS RESERVED 5

MOBILE SPENDING
GROWTH DRIVERS

UK Total Media Ad Spending Growth, by Media,

2013-2018
% change
2013

2014

2015

2016

2017

Digital

16.3%

15.0%

10.0%

8.5%

7.0%

2018
6.0%

Mobile

96.0%

96.0%

60.0%

38.0%

29.0%

20.0%

Outdoor

2.0%

3.5%

2.5%

2.5%

2.0%

1.8%

TV

2.0%

2.6%

1.5%

1.2%

1.0%

1.0%

Radio*

-4.0%

3.0%

0.6%

0.9%

0.2%

0.3%

Print

-6.3%

-5.0%

-3.9%

-3.1%

-1.7%

-1.4%

Magazines**

-5.0%

-5.0%

-3.7%

-3.0%

-2.0%

-1.5%

Newspapers**

-6.7%

-5.0%

-4.0%

-3.2%

-1.6%

-1.4%

Total

5.7%

6.6%

4.6%

4.2%

3.8%

3.4%

Note: *excludes off-air radio & digital; **print only

Source: eMarketer, Sep 2014
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Against that backdrop, mobiles surge is all the more

impressive. While TV continues to attract more spending,
mobiles growth puts the living rooms screen to shame,
with investment expected to inflate 40 times faster than
TV ad spending in 2015, for example. Moreover, mobile is
expected to be the fastest-growing ad medium every year
through 2018, showing consistent double-digit growth
while all other media will see gains in the low single
digitsif any at all.
All of this means mobile will play a proportionally greater
role in the UKs ad economy than it will in the US. While
in the UK, 39.1% of all ad spending will go to mobile in
2018; in the US it will contribute just 26.4% and still play
second fiddle to TV.

For most of the first decade of the 21st century, it

seemed like the mobile advertising boom might never
happen. In the rearview mirror of todays landscape, it
is clear that the prerequisite conditions of widespread
mobile adoption and a well-used ecosystem of
ad-supporting services were not in place. Today,
however, the segment is lifting off, because the
mobile environment can finally support large-scale
marketer interest.
UK mobile adoption, estimated to reach 80.7% of the
countrys population in 2014, is already high and growing
not only larger but the devices owned more advanced
as well. Smartphone adoption is expected to grow by
another 9.7% in 2014, with 69.5% of UK mobile phone
owners and 56.1% of the population forecast to own
such a device by the end of the year. eMarketer expects
the latter figure to swell to 69.1% in 2018. The fast
replacement cycle for mobile devices, typically within
two years, is removing old feature phone handsets with
rudimentary interactive and messaging features from the
market. In their place are models boasting vastly more
sophisticated capabilities, including the display of notably
more attractive advertising assets.
UK Smartphone Users and Penetration, 2013-2018
2013 2014 2015 2016 2017 2018
Smartphone users (millions) 33.2

36.4

39.4

42.4

44.9

46.4

% change

24.6%

9.7%

8.3%

7.6%

5.9%

3.4%

% of mobile phone users

64.3% 69.5% 74.1% 78.9% 82.7% 84.8%

% of population

51.6% 56.1% 60.2% 64.2% 67.4% 69.1%

Note: individuals of any age who own at least one smartphone and use the
smartphone(s) at least once per month
Source: eMarketer, Aug 2014
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UK mobile phone owners are heavy users of the

advanced but increasingly everyday features and
services available on their smartphones. According to
InMobis Global Mobile Media Consumption report,
UK mobile internet users spent more minutes per day in
January 2014 using their mobile devices than watching TV
(168 minutes vs. 132 minutes).

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2014 EMARKETER INC. ALL RIGHTS RESERVED 6

Furthermore, smartphones are fast becoming UK mobile

owners most valued digital device. Smartphone owners
in Great Britain polled by Ipsos MORI in September 2013
said they would miss their mobile device more than their
TV if they had to give up one or the other. Additionally, in a
survey conducted from March to April 2014 by the Office
of Communications (Ofcom) and Jigsaw Research, 28% of
UK consumers said they considered the internet from their
smartphone an essential service, compared with those
who said the same of the countrys Freeview free-to-air TV
platform (26%), pay TV platforms (20%) or radio (16%).
This heightened exposure to mobile experiences may be
encouraging consumer acceptance of advertising in that
realm. In the InMobi survey, 35% of UK mobile internet
users said they were more comfortable with mobile ads
than ads in other media, a rate 2 percentage points higher
than the worldwide average. In addition, only 14% of UK
respondents said they were less comfortable with mobile
ads than other types5 percentage points lower than the
worldwide average.

MOBILE SPENDING BY FORMAT

More attractive devices and services, growing
adoption and better attitudes to mobile advertising
have given advertisers and their agencies greater
reason and confidence to invest in mobile. Marketers
have witnessed the conversion of consumers media
time from broadcast to smart device, and they are
now moving their money in an effort to follow. Overall
segment growth will evolve in different ways as
marketers place greater or lesser emphasis on the
individual mobile channels.
Within the core ad categories of search and display,
mobile spending closely resembles the profile of overall
digital spending in the country, as historically dominated
by desktop. The majority of UK mobile advertising money
is spent on search; eMarketer estimates spending will
swell to about 1.04 billion ($1.63 billion), or 51.7% of total
mobile ad spending.
UK Mobile Ad Spending, by Format, 2013-2018
millions of
2013

2014

2015

2016

2017

2018

Search

582.6 1,044.7 1,665.1 2,378.2 3,108.1 3,778.1

Display*

432.4

949.8 1,519.6 2,007.8 2,532.5 2,970.0

Video

69.4

222.3

420.3

669.3

978.5

1,243.2

Other**

13.0

26.3

48.5

75.9

115.1

158.9

Total

1,031.0 2,020.8 3,233.2 4,461.8 5,755.8 6,906.9

Note: numbers may not add up to total due to rounding; ad spending on

tablets is included; *includes sponsorship, standard display, video and
other display formats; **includes classified, mobile SMS/MMS, tenancies,
and other
Source: eMarketer, Sep 2014
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On the desktop, search advertising has led investment

because it offers marketers performance-based
outcomes, principally delivered by market-leading Google.
Searchs place in the mobile ecosystem is cemented
especially by the pervasiveness of Googles Android
operating system (OS).

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2014 EMARKETER INC. ALL RIGHTS RESERVED 7

The leading installed mobile OS in the UKgrabbing

a 53.0% share of total users in 2014 and still growing,
eMarketer estimatesAndroid is tied tightly into Googles
services. It is frequently delivered with a search box
on phone home screens and was recently upgraded to
feature the Google Now voice interaction feature, which
leverages Googles Knowledge Graph semantic search
feature to return direct results. Androids growthdriven
by shipment success for major original equipment
manufacturers (OEMs) led by Samsungis maximizing
the volume of UK mobile web search results and, with
them, adjacent paid search ads.
While these underlying changes have helped to increase
mobile search ad sales, mobile display ad spending is
now happening more than three times as fast, moving
the overall UK mobile ad market toward equivalence
between display and search.
In fact, the rate at which advertisers are piling in to mobile
display is one of the key factors behind the growth in
digital display ad sales overall across device formats.
eMarketer expects that UK mobile display ad spend
will grow by 119.6% this year, a rate more than three
times faster than overall digital displays 34.2% growth.
Yet the current surge in this segment is expected to tail
off, becoming more modest than that of search in the
years ahead.
UK Mobile Ad Spending Growth, by Format, 2013-2018
% change
2013

2014

2015

2016

2017

2018

Display*

189.2%

119.6%

60.0%

32.1%

26.1%

17.3%

Video

433.8%

220.3%

89.1%

59.2%

46.2%

27.1%

Search

59.6%

79.3%

59.4%

42.8%

30.7%

21.6%

Other**

13.0%

102.1%

84.6%

56.4%

51.8%

38.0%

Total

96.0%

96.0%

60.0%

38.0%

29.0%

20.0%

Note: ad spending on tablets is included; *includes sponsorship, standard

display, video and other display formats; **includes classified, mobile
SMS/MMS, tenancies, and other
Source: eMarketer, Sep 2014
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The UK audience for mobile web content has boomed as

mobile device adoption and sophistication have grown.
For instance, monthly visits to newspaper sites accessed
via mobile phone in the UK swelled past 1 billion in June
2014a 10% rise from June 2013, according to findings
from comScore GSMA Mobile Media Metrics. Now that
each mobile web page view brings another ad view,
UK mobile display volume is rocketing on the web as
a consequence.
But mobile internet usage is dichotomousunlike on
the desktopas mobile users are spending increasingly
more time with apps and less with the web, studies are
starting to show. UK-specific figures are difficult to come
by, but in the US, apps accounted for 86% of consumers
daily mobile time in March 2014, according to a study by
mobile analytics firm Flurry. This was up from 80% a year
earlier, pushing time spent in mobile web browsers down
to just 14%.
As mobile devices displace desktop consumption
generally, the popularity of apps will be amplified.
According to May 2014 findings from comScore Media
Metrix Multi-Platforms, mobile apps accounted for the
majority (51%) of time spent with all digital media by US
internet users.
Publishers are carving out ad space in the free,
mass-market versions of their apps in order to help
monetize those efforts, often in place of charging for initial
app downloads or ongoing subscription fees.
In a July 2014 survey from consultancy Voxburner, 54% of
UK internet users ages 16 to 24 said they preferred these
free, ad-supported apps, while 97% preferred some form
of free or free-plus-purchase option.
Preferred Type of App According to UK Millennial
Internet Users, by Gender, July 2014
% of respondents in each group

www.eMarketer.com

DISPLAYS GRAVITY SHIFTING FROM WEB

TO APPS
Display advertising to fund free consumer access
to content sites like newspapers has long been the
internets most common operation mode. Likewise,
it has been the template adopted on the mobile
web as publishers seek audiences of scale in the
mobile environment.

Female

Male

Total

Ad-supported (a free app with ads)

56%

50%

54%

Freemium (a free version with option to

buy full version)

21%

23%

22%

In-app purchases (a free app with things to

buy inside)

22%

21%

21%

2%

6%

3%

Paid

Note: ages 16-24

Source: Voxburner, "Young people and apps" as cited in company blog,
July 16, 2014
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This app monetization paradigm is shifting the weight of

UK mobile display ad spending. Whereas in 2012 when
the mobile web and apps enjoyed an equal share of UK
mobile display revenue, the scales tipped in the favor of
apps in 2013, which took 60% vs. mobile webs 40%,
according to an IAB UK/PwC study of mobile standard
display ad revenue among 50 UK major media companies.
And this trend will continue, at least for the time being.
Many mobile practitioners hold hopes for new web
publishing technologies, such as HTML5 enabling
production of mobile websites (web apps) as sophisticated
as their native app counterparts. For now, few industry
observers believe this will happen soon. However, if
publishers continue attempting hybrid strategies, such as
releasing native mobile apps that are merely wrappers
for underlying websites, then web-delivered display
will continue to enjoy a significant placeeven in an
app world.

MOBILE WILL LOOK MORE LIKE TV AS

VIDEO AND TABLETS TAKE OFF
UK mobile advertisings fastest growth will come not
from display advertisings traditional static formats, but
from ads placed in videos.
Despite pulling just 69.4 million ($108.4 million) in
2013, video ad spending more than quadrupled as
brand advertisers poured money into the format,
eMarketer estimates. While growth in all mobile ad
categories will slow up from these kinds of spikes as
the medium matures, video will continue to be mobiles
fastest-growing single stream in the UK, growing 220.3%
this year before moderating to 27.1% growth in 2018,
eMarketer predicts. At this rate, video will represent 18%
of all UK mobile advertising by the end of the forecast
period, smashing through the billion-pound mark.
In 2014, mobile video ad spending will multiply twice
as fast as spending on digital video generally220.3%
vs. 107.3%as consumers and advertisers alike take to
mobile delivery with gusto.
It is only fairly recently that advanced mobile handsets
with touchscreens, vivid displays and large viewing
areashave supported the mobile video opportunity in
any real sense. Consumption boomed in 2012 as these
devices achieved wider circulation. eMarketer expects
30.7% of the UK population will watch video on a mobile
phone this year, a rate projected to rise to 42.4% in 2018.

UK Mobile Phone Video Viewers, 2013-2018

2013

2014

2015

2016

2017

2018

17.2

19.9

22.8

25.3

27.2

28.5

% change

37.1% 16.0% 14.2% 11.0%

7.6%

4.7%

% of mobile phone users

33.3% 38.1% 42.8% 47.1% 50.1% 52.0%

Mobile phone video

viewers (millions)

% of digital video viewers 49.3% 54.1% 59.2% 63.3% 66.1% 67.4%

% of population

26.7% 30.7% 34.8% 38.3% 40.8% 42.4%

Note: mobile phone users of any age who watch video content on mobile
phones through a mobile browser, subscriptions, downloads or applications
at least once per month
Source: eMarketer, Aug 2014
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In addition to chasing a ballooning audience, burgeoning

ad spend is a product of the growing number of premium
video services available across mobile devices. Following
the template of the BBCs iPlayer catch-up service being
available across multiple devicesincluding mobile
commercial broadcasters including ITV, Channel 4 and
Channel 5 are also determinedly seeking more viewers
for their comparable catch-up services in order to sell
more video ads.
In its half-year interim results published in July 2014,
the UKs leading commercial network broadcaster ITV
reported that mobile and tablet viewing of its ITV Player
service was the main driver behind a 20% year-over-year
jump in long-form video views, to 328 million, leading to
strong demand from advertisers holding up rates and
driving revenues.
Unlike on desktop, mobile video is a particularly
appealing channel to buyers in the UK because, just
like with television, viewers must typically devote their
entire attention to the main content on the screen.
Likewise, linear video is familiar both as content and as
an advertising construct to everyone in this value chain.
Creatives know how to make it, buyers know how to
secure it, publishers know how to sell it and consumers
even if they often chafe at pre-rollshave inherited the
rules of this game from years spent watching linear TV.
In fact, UK mobile phone owners surveyed in November
2013 by PwC said video was their second most preferred
mobile ad format, behind only banners.
Despite the many variables moving in mobile video ads
favor, agencies continue to complain that there remains
an insufficient supply of premium inventory to enable
them to reach the right consumers. Publishers, then, will
likely find buyers ready and waiting, if they can guarantee
agencies sufficient reach and targeting.

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But the context of this consumption will matter. While

smartphones have been eating into desktops leading
share of UK video views, tablet devices have fast
been gaining share. InMobi, one of the worlds largest
independent mobile ad networks, found that 39.3% of
the UK ad impressions it served during Q2 2014 were
from tablet and connected devices, up 14.4% from a year
earlier, with iPads responsible for the largest share of
impressions by any mobile device. Since tablets are more
commonly used at home than on the go, this means the
mobile video advertising opportunity is becoming more
of a customers-on-the-couch situationand with that a
more TV-like experience.
UK Mobile Ad Impression Share, by Device, Q2 2014
% of total
Feature phones
4.0%

DIGITAL TITANS RULE MOBILE

WITH SOME TWISTS
The mobile internet may be changing the overall
digital landscape, but the winners of consumers
mobile media time are, broadly, the same as on
the desktop.
According to comScore GSMA MMM, in a top 10
ranking by unique visitors in March 2014, mobile web
properties were essentially the same as for the desktop.
Unsurprisingly, Google sites led in both environments.
Top 10 UK Mobile Web Properties, Ranked by Unique
Visitors, March 2014
millions
Google sites

28.0

Yahoo sites

Tablets &
connected devices
39.3%

Smartphones
56.7%

26.2

BBC sites

19.4

Facebook

19.1

Amazon sites

Note: represents activity on InMobi's network, broader industry metrics

may vary
Source: InMobi, "United Kingdom Market Overview," July 2014
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17.3

Wikimedia Foundation sites

13.7

Glam Media

13.5

eBay
Apple
Microsoft sites

13.3
12.3
11.3

Note: includes on- and off-network browsing via browser and app;
excludes Wi-Fi data for untagged mobile apps
Source: comScore GSMA Mobile Media Metrics (MMM), "UK Digital Market
Overview," June 4, 2014
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However, some variations between the platforms point

to an enhanced position for certain properties on mobile
vs. desktop.
First, Microsoft sites fared considerably worse on
mobile than they did on desktop. This is mostly
because Microsoft lacks the same kind of browser
on-ramp traction on mobile devices that it does on
Windows computers. Its acquisition of Nokia has done
little, apparently, to move its mobile fortunes forward.
Additionally the BBC, which was the No. 3 UK mobile
property in terms of traffic, fared notably better on
mobile than on desktop, where it ranked seventh.
Its mobile appeal, however, is a hollow victory in the
advertising stakes, as the BBC is prohibited by Royal
Charter from running advertising to UK license fee payers,
meaning a large chunk of UK mobile video consumption
goes unmonetized.

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The mobile web portals of network operators did not

figure on either list. Mobile operators have frequently
been disintermediated from the value chain they helped
create, turned in to mere access points. But they are
currently deploying jointly-operated mobile display ad
network Weve, which could help them regain a seat at
the table by utilizing their trump card: access to user data,
including location and browsing behavior.
Owning the physical device in consumers hands is no
guarantee of advertising success, however. Apples iOS
devices are responsible for more UK ad impressions
than those of any other manufacturer56% in Q2
2014, ahead of a range of Android devices, according to
findings from InMobi. Despite this, Google is the mobile
ad ecosystems biggest winner. This is Googles prize for
operating a series of leading online servicesplus its
own DoubleClick and AdMob ad networksleveraged
across handset types.
The trio of Google, Facebook and Twitter leads the pack
when it comes to global mobile ad revenue, eMarketer
found in its analysis of company reports. However, none
of the three breaks out its UK earnings from mobile
advertising, so ascertaining the true winners of UK mobile
ad spending is difficult.

SOCIAL ADS: FROM MOBILE-FIRST TO

MOBILE-MOST
Within cross-platform display ad sales in the UK,
eMarketer expects Facebooks share will reach 22.8% in
2014, compared with Googles 22.2%. Meanwhile Twitter,
if only by virtue of being later to develop, is growing
faster still.
In recent years, Twitter has made inroads building out
both its commercial team and delivery for its advertising
propositions, including Promoted Tweets, Accounts and
Trends. According to IAB UK and PwC, while only
one-third of UK social display ad spending was on mobile
last year, in-stream formats like Twitters will grow
mobile social revenue into new territories, alongside
conventional display. Sales are benefitting from UK
appetite for on-the-go social networking services, the
consumer value of which are multiplied when unchained
from the desk and whose ongoing status updates
promote compulsive revisits.

Despite Twitter not yet figuring in comScores analysis

of top mobile properties, September 2013 research
conducted by Kantar for Ofcom found that 23% of UK
smartphone users tweeted using the platform, giving
Twitter significant potential traction in the marketplace.
In its 2014 Q1 earnings call, Twitter reported that mobile
was playing a growing part in its overall ad sales mix,
reaching 80% of total revenueup 20% from a year
earlier. Worldwide, eMarketer estimates, Twitter will
earn $1.17 billion from advertising in 2014, with 76% of
the total from mobile. eMarketer expects Twitters UK
revenue total to reach $151.32 million (96.8 million)
in 2014. Assuming revenue from mobile continues to
be about 80% of the total, it would put mobile-derived
revenue for 2014 at $121.06 million (77.5 million).
Cross-device user analysis supports that calculation.
Twitter and Nielsen confirmed 80% of its UK users
accessed the site via mobile, the highest proportion
along with Spain among the four countries surveyed in
Europe. Meanwhile, 72% of Facebooks UK users access
via smartphone, according to YouGov. Furthermore,
eMarketer expects this trend will grow to 93% of social
network users accessing Facebook via mobile in 2018.
Globally, Facebooks revenue from mobile ads
represented 62% of its total ad revenue during Q2 2014,
up from 41% a year earlier. This proportion likely is at
least matched in the UK market. Applied to the nearly
546 million ($853.1 million) eMarketer expects Facebook
to earn from ads in the UK in 2014, this would suggest
the site is on course to earn 329 million ($514 million)
from mobile ads this year.

News Publishers See Mobile Gains Through

Desktop Lens
Some UK media publishers are undecided over their
preferred mobile monetization methods, caught between
either launching subscription apps that provide recurring
consumer revenueand in doing so limiting potential
user sizeor offering ad-funded free mobile websites
that allow ad inventory to be sold in a way that is at least
familiar from the desktop days. The Guardian, for instance,
has frequently used its newspaper pages to promote
not its premium mobile app but its free mobile site, as
growing audience has been the order of the day.

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Despite this indecision, a Deloitte survey of publishers

who are members of the UKs Association of Online
Publishers (AOP) found that Q1 2014 revenue from
mobile and tablet advertising and subscriptions rose more
than 60% from the corresponding period in 2013.
Many publishers continue to operate both revenue
channels simultaneously and are currently retooling
their first-generation, ad-funded mobile websites with
responsive design principles, ensuring viewability of
editorial and advertising across a range of devices.
This move arises out of necessityscreen size
proliferation is causing developers headachesbut
marrying the web production process may also blur the
lines between desktop internet ad sales and mobile
internet ad sales, unlocking mobile buys from existing
desktop advertisers.
Indeed, UK agencies press buyers report they are four
times more likely to buy tablet ads from publishers than
to buy smartphone ads from them, according to IAB UKs
IAB Snapshot Research 2013 report.

Agencies Will Move Money to Mobile to

Follow Millennials
There are growing signs of mobiles maturity and
acceptance within advertising agencies. IAB UK found
that a combined 57% of agencies surveyed said they
would spend more than 10% of their digital ad budgets
on mobile in 2014. A year earlier, only 33% had planned
to do so. But now the most likely scenario is that up to
a fifth of UK agency money will go on to mobile efforts
this year.

Percent of Digital Ad Budget to Be Spent on Mobile in

2014 According to UK Agencies
% of respondents
None
1%
0%-1%
1%
1%-5%
15%
6%-10%
26%
11%-20%
41%
21%-40%
14%
41%-60%
1%
61%-100%
1%
Source: Internet Advertising Bureau UK (IAB UK), "IAB Media Agency
Snapshot Research 2013," Dec 11, 2013
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Their motivations are clear. UK agencies have witnessed

the growing adoption of mobile devices and their
displacement effect on other media consumption. IAB UK
found that the majority of its respondents (78%) believed
mobile will be the primary medium for communicating
with consumers ages 12 to 24, and agencies are
adjusting their channel mix in response.
Increasing familiarity of key mobile marketing concepts
among agency staff is also encouraging greater
deployment of mobile efforts, as 38% of respondents
said mobile had become a regular part of client proposals.
Advertisers are benefitting from the increasingly relaxed
attitude of publishers and networks toward allowing
ad buys using programmaticthat is, automated
technologies. Buyers, who are enjoying increasingly
sophisticated control over their ad targeting and spending
in desktop digital outlets, are embracing this precision
with even greater gusto on mobile. In 2013, 37% of UK
mobile digital display ads were bought using either
direct- or exchange-based programmatic methods,
according to study from IAB UK conducted by
MTM London.

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UK Digital Display Advertising Sales Method Share,

by Channel, 2013
% of total

UK Mobile Display Ad Spending Share, by Industry,

2012 & 2013
% of total
2012

2013

Consumer goods

20%

24%

Entertainment & media

22%

22%

Retail

13%

11%

Telecom

10%

9%

Technology

8%

9%

Finance

9%

7%

Automotive

9%

7%

Travel & transport

4%

4%

Government, political organizations

2%

2%

Business & industrial

2%

2%

Leisure equipment

1%

1%

Internet video
59%

25% 14% 2%

Internet display
55%
Mobile (display & video)
36%

12%

19%
27%

14%

14%
23%

Total
51%
Direct
Networks

22%

13%

15%

Programmaticexchanges
Programmaticdirect

Note: numbers may not add up to 100% due to rounding

Source: Internet Advertising Bureau UK (IAB UK), "Media Owner Sales
Techniques" conducted by MTM London as cited in press release, June 25,
2014
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Tim Elkington, research and strategy director at IAB

UK, explained programmatic buyings growing role in
the mobile ad economy in a June 2014 company article:
Programmatic is more dominant on mobile due to
various factors; its a more fragmented ecosystem
and, being relatively harder to monetize, has enabled a
wide range of intermediaries to develop more quickly,
particularly having learned lessons from serving ads
programmatically on PCs.
Even if mobile is later to the programmatic buying party
than desktop was, the fact that these tools are used to an
even greater extent will encourage fast buy-side adoption,
because advertisers and agencies will value the foresight
and certainty that comes with these technologies,
increasing their comfort about results and spending.

Mobile Ad Buyer Mix Resembles Digital

The UK is witnessing the mainstreaming of mobile
advertising in client circles, as marketers of consumer
packaged goods (CPGs) up spending in the mobile
space. According to latest available full-year data from
IAB UK and PwC, consumer goods and entertainment
and media advertisers accounted for the largest shares
of UK mobile display spending in 2013, with CPG
brands becoming the leading category in the last year,
representing a 24% stake.

Note: numbers may not add up to 100% due to rounding

Source: Internet Advertising Bureau UK (IAB UK) and
PricewaterhouseCoopers (PwC), "UK Digital Adspend Study Full Year 2013,"
April 8, 2014
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They have, no doubt, been encouraged by the widening

use of smartphones to a broader base of consumers,
providing an opportunity to advertise a wider range of
goods. Specifically, CPG brands boosted their 2013 UK
mobile spending by 175%, ad network InMobi reported
earlier this year.
Mobile takes proportionally more ad money from
CPG brands than do digital platforms, and in general
is attracting greater investment from industries
whose products require less consumer reflection
before purchase.
There is an amusing irony within this trend. Opera
Mediaworks, an ad network deployed through 13,000
mobile sites and apps, said the largest volume of UK
mobile ad impressions it served during Q1 2014 came
from manufacturers of mobile devices themselves, with
food, drink and automotive advertisers close behind.
In this sense, it is tempting to think of the mobile ad
ecology as at least partly self-sustaining. After all, the
same relatively rapid replacement cycle that has pushed
attractive touchscreen devices into consumers hands in
the first place is not abating. Indeed, with wearables and
other new device categories expected to emerge from
handset makers, these launches can also be expected to
influence UK ad spending patterns, as manufacturers look
to drive demand for the future of mobile consumption.

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CONCLUSIONS
Advertisers are moving money to mobile faster than
any other platform. Mobile ad spending growth is
exceeding even the quick pace set by digital ad spending
during its boom days early this century. In a relatively
short timeframe, the majority of UK digital ad spending
will be on mobile channels.
Mobile will overtake TV to become the UKs
biggest ad channel by 2016. While TV will remain the
dominant advertising medium for some time, mobiles
spending surge will push it to the top of the pack in just
a few years. This will allow for deeper exploration of
synchronized second-screen ad executions that harness
the capabilities of each channel and maximize advertisers
opportunities.
Marketers will move from desktop to mobile. This
years boom in UK mobile ad spending will coincide with
the first-ever drop for UK desktop digital ad spending. This
transference will mimic the movement of consumers
media time from desktop web to mobile web and
apps. Publishers should ensure they have products and
inventory to capitalize on this trend and should adopt a
multichannel monetization strategy.

RELATED EMARKETER REPORTS

2014 US Mobile Ad Spending Forecast: Robust
Growth Despite Persistent Challenges
UK Ad Spending: Q2 2014 Complete Forecast
UK Mobile Advertising: Device Adoption Drives a
Spending Boom
UK Mobile Ad Trends: Mobile Matures, Yet Growing
Pains Persist

RELATED LINKS
Advertising Association (AA) UK
Association of Online Publishers (AOP) UK
comScore GSMA Mobile Media Metrics (MMM)
Decision Fuel
Deloitte
DoubleClick
Facebook
Flurry
GroupM
Internet Advertising Bureau UK (IAB UK)

Booming consumer adoption is drawing advertisers

display spending. UK consumers are increasingly avid
mobile device users. Smartphone adoption will near 70%
of the population by 2018, and more consumers already
rate smartphones as more essential than TV. It is the
growing presence of these engaging touchscreens that is
convincing marketers of the value of mobile advertising.

InMobi

Video is the strongest driver of the mobile ad

marketer. Forecast to grow by 220.3% in 2014 alone,
mobile video is rocketing. Advertisers value video
because it creates a linear brand awareness opportunity,
while consumers are showing growing appetite for digital
video. This comes into its own on tablet devices. With UK
tablet usage at over 40% of the population in 2014, tablet
video will excite marketers in the next few years.

Office of Communications (Ofcom) UK

Ipsos MORI
ITV
Jigsaw Research
Kantar Media
MTM London
On Device Research
PricewaterhouseCoopers (PwC)
Voxburner
YouGov

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EDITORIAL AND
PRODUCTION CONTRIBUTORS
Cliff Annicelli
Ben Clague
Joanne DiCamillo
Noah Elkin
Stephanie Meyer
Dana Hill
Kris Oser
Ezra Palmer
Heather Price
Katharine Ulrich

Managing Editor, Reports

Chart Data Specialist
Senior Production Artist
Executive Editor
Senior Production Artist
Director of Production
Deputy Editorial Director
Editorial Director
Copy Editor
Copy Editor

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