A report by the British advertising agency Kantar Worldpanel, released in the US last week, found that over the course of a year, UK households spent more than US$30bn (£19.7bn) on ad-related ad spending, or about 1.3 per cent of their gross domestic product.
The report estimates that UK households spend about US$6bn (£3.2bn) per month on these types of adverts, or almost 4 per cent, of GDP.
“These are not just an advertising budget, these are actually spending dollars,” says Adam Johnson, head of advertising at Kantar.
“We’re spending money that’s actually going to be in our pockets, and that’s not something that advertisers can afford to ignore.”
The report found that UK consumers spent more money on ad impressions in the last 12 months than they did the entire year prior, and it also found that the average spend on ads by UK households in 2016 was US$1.4bn (£1.1bn).
“We think that is a good start,” says Johnson.
But it’s far from the only indicator of ad spending in the UK.
Advertising spend per head is also a big part of that picture.
The UK spent £3.1 billion on advertising in 2016, according to Kantar, and spending on ad services accounted for a further £2.2 billion, or nearly 4 per in 10 UK households.
The most popular type of ad, the direct marketing campaign, accounts for almost 70 per cent.
And for all that advertising, the UK still lags behind the US when it comes to spending on digital ad services, which accounts for nearly 50 per cent (£3bn) of spending.
Advertising revenue from digital ad spend is forecast to grow at a slower rate in 2020 than in 2016.
However, that’s still forecast to be higher than in other developed economies, such as the US and Canada.
What’s behind the UK’s low ad spending?
Advertising is a relatively new phenomenon in the United Kingdom, which has long been a leader in the world of digital ad spending.
For years, ad spending was mostly confined to TV, and in some cases was limited to only the very top of the corporate hierarchy.
Now, digital is increasingly part of everyday life, as advertisers have the ability to target their ads to users across all digital platforms.
As the UK population has grown, the number of ad campaigns has increased too, so the UK is now a major player in the digital advertising world.
In the past decade, UK ad spend has grown by 4.4 per cent a year and in 2020, the average ad spend per UK household was expected to increase by 6 per cent to $2,600, according the Kantar report.
However that is only a fraction of the US’s $5.2 trillion spend on digital ads per year, or 5 per cent more than in the country.
What will happen to the UK ad spending if it gets out of the digital world?
The biggest change will be that digital ad campaigns will need to be targeted to UK households, Johnson says.
In 2018, the Government set up a new digital strategy called the Digital Economy Strategy, which is aimed at getting advertisers to invest in digital advertising in Britain, and will aim to help the industry stay competitive.
The strategy is also looking at ways to support ad-driven content delivery services (ADDS), which aim to deliver online content to UK homes in a way that’s easier for advertisers to deliver to the wider world.
The aim is to make the UK a digital powerhouse in this space, says Johnson, who believes that the UK could become the world leader in this area in the future.
“The UK is a really interesting market.
We’re going to see the likes of Google, Facebook, Twitter, Snapchat, and others take their lead in this,” he says.
“They are really going to bring this to the market.”
The Government also recently announced that it will set up its own digital advertising agency to develop and launch new digital campaigns.
But Johnson says that the agency won’t be able to compete with ad agencies in the long run.
“If we can’t compete in the way that we are now, I don’t think we will be able in the near future,” he said.
“There’s a lot of potential for the UK to become a leader, and I think that’s a very good thing for all of us in the ad industry.”
What’s the future of digital ads?
There are currently three main ways advertisers can target their digital ad content to consumers.
First, they can use existing digital ad formats to offer their advertising.
For example, they could offer a product or service in their ad campaigns that they already offer on their social networks.
Second, they use a different format altogether, like a branded website, in order to reach consumers with their ad content.
Third, they choose to target people using a mobile app.
The third way advertisers can