FMCG firms help push digital adspend to record high of £2.6bn

FMCG brands in particular, which are the joint-highest online display spenders for the first time, have embraced these channels, according to the Internet Advertising Bureau UK (IAB).

UK figures from the IAB and PricewaterhouseCoopers reveal that the value of like-for-like internet and mobile advertising increased by 12.6% to a record six-month high of £2.59bn in the first six months of 2012.

Investment in mobile rose 132% year on year to £181.5m, video was up 43% to £69.8m and social media banners increased 36% to £134.2m.

Tim Elkington, director of research and strategy at the IAB, said: "Video, social and mobile really appeals to FMCG advertisers [as] they can do interesting stuff that they couldn't do a few years ago."

FMCG brands' share of digital display, which includes video and social, is now at 15.8%, having nearly doubled in the past three years. This makes FMCG the joint-highest-spending sector in display, alongside finance.

Category	H1 2011 share (%)
Search	58
Display	23
Classified	17

Elkington said: "FMCG brands are starting to see that online is not just about direct response and click through."

Anna Bartz, senior manager at PwC, said: "For the first time since we started measuring digital adspend, consumer goods (FMCG) advertisers have joined the long-time leader, financial services, at the top of the spending charts.

"Interestingly, spend by FMCG advertisers increased across all digital channels, reflecting advertisers’ recognition of online and mobile as brand building platforms."

Overall paid-for-search had the greatest share of digital expenditure at 59%, slightly higher than for the same period last year, when it accounted for 58%. This was followed by display (23%) and classified (12%), while other formats, such as SMS and lead generation, accounted for the remaining 2%. 

	Market share (%)
Consumer goods	15.8
Finance	15.8
Entertainment & Media	12.9
Retail	10.6
Travel & Transport	10.2
Technology	7.6
Motors	7.5
Business & Industrial	6.7
Telecoms	6.6
Government & Politics	3.5
Property	1.3
Leisure equipment	1.0
Gardening	0.6

Search saw the greatest growth among the categories, up 15% like-for-like, year-on-year. Elkington said its transparency and measurable ROI appealed to marketers in hard economic times. He said: "Search will guarantee sales and traffic."

Display advertising across the internet and mobile also saw a lift from video and banners in social media. It grew 10.6% year-on-year on a like-for-like basis to £590.9m in the first half of 2012.

The mobile market grew 132% year-on-year to £181.5m, meaning it accounted for 7% of total digital expenditure.

The greatest portion of mobile adspend was taken by search, accounting for 73%, followed by banners and text links (23%), SMS and MMS (2%), video pre/post roll (1%) and tenancy deals (1%).

Elkington said: "It is easy to take this online growth for granted, but if you look at it in context of what happening in the wider economy, with GDP at -0.3% and -0.4% for the past two quarters, we've got an industry growing, despite challenges.

Earlier this year the IAB and PwC announced that digital adspend had grown 14.4% in 2011 to £4.8bn.

The IAB has not given any prediction of spend for the whole of 2012, although Elkington said in the short to near term, the rise in consumer technology should sustain growth.

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This article was first published on marketingmagazine.co.uk