UK digital ad spend has increased by 12.5% and almost reached £5.5 billion in 2012. The latest figures come from the annual digital ad spend report from the Internet Advertising Bureau UK (IAB), conducted by accountancy firm PwC.

Once again, mobile is the big story. It now accounts for 10% of all digital spend and crossed the half billion mark for pounds spent on the channel. Half of the entire digital ad spend increase for 2012 (£607 million) came from mobile.

Mobile advertising has grown by 146% like-for-like to £526 million in 2012, from £203.2 million in 2011. The channel now accounts for 9.7% of all digital advertising spend compared to just 1.1% in 2009.

It’s worth noting that these figures don’t yet include any campaigns carried out in performance marketing, although arguments could be made that it sits under the digital advertising moniker.

The Mobile Milestone

Tim Elkington, director of research and strategy at the IAB, believes mobile is no longer an afterthought as advertisers become more knowledgeable about the medium and buy campaigns across both online and mobile.

“Mobile has reached this milestone because marketers are becoming more attuned to the ‘always on’ nature of consumers who expect to engage with content wherever they are,” Elkington said.

In display, online and mobile sponsorship rose by 34% to £65.7 million from £49 million. It makes up 5% of digital display and goes some way to explaining digital sponsorship spends increase of 128% in the last three years.

Social and Video Propels Display

The broader display picture saw less of a gain, but the 12.4% like-for-like growth to £1.3 billion from £1.14 billion in 2011 is nothing to be sniffed at. Much of the upsurge came from video and social media advertising.

Video is up 46% to £160 million from £109 million and accounted for 12% of online and mobile display in 2012. Whilst the figure only saw a 10% increase on 2011, it has risen by 471% in the last three years.

Social media advertising has benefitted from the new products Facebook and Twitter are rolling out for brands looking to engage with consumers. There’s been a notable increase of 24% from £265 million in 2011 to £328.4 million in 2012.

Entertainment Sector Sees Value in Mobile Display

The UK IAB revealed the top five display advertising sectors in 2012 were finance (15%), entertainment and media (13%), retail (12%) and technology (9%). For mobile display, they were entertainment and media (16%) consumer goods (13%), retail (12%), finance (12%) and technology (11%).

PwC senior manager, Anna Bartz, put the changing trend in display down to the desire from advertisers to tell more of a story with their advertising campaigns, which can only be done in richer media formats.

“The advertising market is shifting toward storytelling and integrated campaigns which give greater prominence to video and display formats with a higher degree of interactivity with the target audience,” Bartz said.