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Big swings in UK digital ad spending by industry, but retail pulls ahead

The UK’s digital advertising industry weathered the pandemic remarkably well. Among the industry sectors we track, digital ad spending will rise across the board (which was not universal last year), but these growth patterns will fluctuate wildly across categories.

In 2020, digital spending increased 8.0% and will rise another 16.8% this year to £19.23 billion ($24.66 billion), cementing the UK’s position as the largest market for digital ad spending in Europe. For the first time, digital will account for more than three-quarters of total UK media spend this year.

Despite some deceleration through to the end of our forecast, gains will still be significant each year, with digital’s share approaching four-fifths of all spend in 2024 at £25.93 billion ($33.26 billion).

Looking at the breakouts of spend across industries, though, the pandemic heralded something of a rollercoaster ride. Ad spending growth was relatively even across the board in 2019, but we saw massive declines in 2020 for some segments like travel (-51.0%) and huge growth for others like computing products and consumer electronics (38.8%).

And a few notable big swings are expected this year, too:

  • Travel ad spending will rise 33.0% this year—a massive 84-percentage-point swing.
  • Retail’s growth rate is expected to double.
  • On the flip side, consumer electronics will shed more than half its growth rate.

All industries we track will increase their spending, with travel leading the way. Automotive will prop up the list with modest growth of just 7.8%.

Travel’s sizable gains this year, though, will do little to help it regain much ground in its share of total digital ad spending. Pre-pandemic, travel spending accounted for 10.8% of the digital total. Last year, that proportion plummeted to just 4.9%, and despite strong growth in spend in 2021, it will “recover” to just 5.6%.

Retail will continue leading the pack and account for more than a fifth of total spend in 2021. Consumer packaged goods (CPG) will follow with a 14.5% share, while computing products and consumer electronics’ share will level out at 12.0%. Financial services and automotive, meanwhile, will steadily decline in share throughout the rest of the forecast.

The “Other” category accounts for a large proportion of spend and contains industries that are sizable but not sizable enough to be broken out individually (health and pharma, real estate, business, and industrial and education, for example).

The only change in the ranking this year will be computing products inching ahead of financial services into third place.

In pure monetary terms, digital ad spending in the retail industry leads by a wide margin. This year, total spend will come in at £3.98 billion ($5.10 billion), ahead of second place CPG, at £2.79 billion ($3.58 billion). Computing products and customer electronics, financial services, and automotive follow retail but with just £260 million separating them in the rankings.

When it comes to device trends, the pandemic did little to change the narrative. Though people in the UK have certainly been less physically mobile in the past year and a half, their reliance on mobile devices hasn’t altered.

In terms of digital advertising, mobile’s strength has been furthered as it accounts for between 72.7% (for computing products) and 83.0% (for CPG) of all digital spending in each industry.

Mobile spending may well have forged ahead during the pandemic, but desktop/laptop spending hasn’t exactly stood still. After last year’s 2.7% decline, desktop/laptop spending will grow 9.2%. Note that we include connected TV (CTV) advertising spend in our desktop/laptop total, which is likely responsible for the increase, as the opportunity in CTV for marketers in the UK continues to expand.