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UK advertisers spent £6.3bn targeting online and mobile shoppers in 2013

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UK retailers and other advertisers spent £6.3bn in 2013 reaching consumers who surf the internet through a growing array of devices, new figures show. More than £1bn of that total was directed at those who use a mobile device to go online, found the latest Internet Advertising Bureau UK (IAB) Digital Adspend report, carried out by PwC, found.

Indeed, the figures suggest, more than one in four British shoppers now owns a tablet computer. Ownership of the devices rose by 63% to 17.9m Britons in February 2014, compared to the same time the previous year, when 11.0m people owned them.

Take into account that more than a third (36%) of people accessing the internet do so through a tablet, according to UKOM/comScore figures, and the focus is now firmly on reaching those tablet owners. Still more so since the figures show tablet owners tend to keep them close: 57% said it was their go-to device to surf the internet at home, 66% said it was easier to use a tablet to go online, and 65% use them while watching TV.

Two-thirds of people online now access the internet using a PC/laptop and one other device – such as a smartphone or tablet, the research found.

Little wonder then, that mobile ad spend nearly doubled in 2013, passing the £1bn milestone for the first time, and accounting for 16% of all digital advertising spend, up from 10% in 2012.

“Digital advertising continues to grow at impressive rates simply because marketers are becoming more responsive and savvy to the increasing ways people consume content across different devices,” said Tim Elkington, director of research and strategy at the UK’s Internet Advertising Bureau. “However However, there’s still a lot of work for the industry to do when it comes to tablet advertising. Spend on ads designed specifically for tablets is growing fast but it’s still a very small part of the pie – despite the increase in tablet ownership, and the crucial role they play in people’s internet use at home. The tablet has moved from the offices of early adopters to the nation’s living rooms and advertisers should be following suit.”

“Mobile’s huge rise is down to advertisers taking advantage of key developments in the way people use their mobile devices – particularly social media platforms,” said Dan Bunyan, manager at PwC.

“Mobile is now more of a story-telling tool for advertisers rather than just an information device. Almost half of mobile ad spend is accounted for by TVs biggest advertiser categories – consumer goods and entertainment brands – which is testament to how important mobile has become for brands.”

The figures also found that video advertising grew by 62% in 2013, compared to the repvious year, hitting £324.9m, and accounting for 18% of all online and mobile display advertising. The consumer goods sector continued to the biggest spender on digital display advertising, reaching 18% in 2013.

Meanwhile, paid-for search grew by 14% to £3.49bn, and classifieds grew by 9% to £886.5m, accounting for 14% of digital ad spend.

The figures were welcomed by the industry. Dan Cohen, regional director at Tradedoubler, said they showed marketers and retailers were “waking up” to the idea of mobile devices as virtual shop windows.

He said: “If retailers are going to truly appeal to the swathes of consumers that rely on their smartphones and tablets to inform their purchasing decisions, then they must fully embrace this evolving landscape and change their mindset about online shopping as a concept.

“It’s not surprising that advertising spend has broken the £1bn mark, and it certainly isn’t a shock that 60 per cent of tablet owners prefer using their devices to browse the internet. Research from Tradedoubler recently found that tablet shopping is not only a daily activity; it is far more granular than that, with 51 per cent of tablet owners using their device to shop between 5pm and midnight.

“It’s clear that it’s not just consumers that recognise mobile devices as extended shop windows – retailers and marketers know that a large proportion of shoppers are using tablets and smartphones as their first port of call when embarking on a purchasing journey. The important step that retailers and marketers must now take is to refine this online experience for their consumers.”

Mike Harris, VP EMEA at Monetate, said: “This increase in mobile advertising spend is not surprising, it is simply a sign for marketers should continue to invest in mobile advertising. Over the last two years we have carried out our own research which found in Q4 of 2012 traditional devices made up 82% of online traffic whilst in Q4 of 2013 this number had dropped, finding 73% of visits to an ecommerce site were from a traditional device. The research went on to reveal 14% of visits in EQ 2013 came from tablets and 12% from smartphones.

“It is important to recognise that the increased visibility mobile advertising can bring, but it isn’t as easy as waving a magic wand. With higher visibility, businesses need to ensure they target the right people with the right offers. If this isn’t done correctly, it can damage a brand in the eyes of a consumer. To counter this, companies must make sure their advertising is targeted correctly. Through using metadata such as location, device and weather, companies can personalise their offerings to the individual. This can drive higher conversion rates and assist in developing the company’s brand.

“Now retail is a global and multichannel activity, businesses cannot ignore the power of personalisation if they want to prosper.”

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