UK internet ad spend passes £10bn as Google faces YouTube row

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Internet advertising spend surged above £10bn in the UK last year as companies more than doubled the amount they spent on mobile video ads.

The year-on-year increase of 17% on 2015 comes as many advertisers have pulled campaigns from Google and YouTube after it emerged that some ads have been running around inappropriate content such as extremist videos. 

Hundreds of advertisers have “paused” spending on YouTube – where 400 hours of videos are uploaded every minute – which has pledged to tighten controls on where ads appear, such as by banning them running on accounts with fewer than 10,000 viewers.

However, the overall trend is for growth. Last year’s increase, the biggest since 2007, was fuelled by a boom in mobile ad spend, which rose by 51% to £3.9bn.

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“People are increasingly using their smartphones to watch more clips, programmes and films,” said James Chandler, the chief marketing officer at the Internet Advertising Bureau UK, which published the annual digital ad spend report. “Consequently, as companies have to follow what the industry calls ‘eyeballs’ to get their ads in front of people, they have to allocate more budget to mobile and online video as that’s where people are spending more time.”

The IAB report also found that nearly three-quarters of the £3.8bn digital display advertising market is traded programmatically, where machines have become largely responsible for choosing where ads are booked by advertisers and appear on the internet.

Programmatic trading has come under attack following the furore over Googleand YouTube placing ads next to inappropriate content.

“Right now, considerations such as brand safety mean the advertiser is rightly demanding more certainty in the placement of their ads,” said Dan Bunyan, senior manager at PwC, which produced the report with the IAB. “The industry is evolving quickly to find new solutions to address brands’ needs in this dynamic environment.”

The Conservative MP Nigel Huddleston, a member of the Commons culture, media and sport select committee, said: “With huge scale comes huge responsibility. They need to take the concerns of advertisers and the general public far more seriously than they have shown in the past. They need to get their act together and make sure they do a better job at improving blocking inappropriate content.”