Clear Digital Digest: Adspend, ecommerce growth and Amazon Prime

Firstly, some recent stats that caught my eye.  The IAB have released their latest annual figures on digital adspend with 2015 revenue of £8.6bn, up by 16.4% YOY.  With digital spend always growing year on year as it takes an ever increasing slice of the marketing budget, this is not in itself surprising; what is of note however is the fact that this is the fastest such growth seen for 7 years.  This has been driven in the main by mobile spend, which was responsible for 78% of this growth, with mobile now worth £2.6bn (up 60% YOY), accounting for 30% of all digital spend.

Across all devices, search remains the largest digital advertising category, with £4.5bn spent in 2015, a 51% share of digital spend.  Display is the next largest category, accounting for 35% (£3bn), with a majority (60%) of this now traded programmatically.  As well as mobile (and social) helping to drive display spend, content and native advertising grew by 50% YOY, rising to £776m.  In addition, digital spend is actually even larger when factoring in an additional £953m spent on “online performance marketing” – i.e. advertiser spend on “shopper websites” such as voucher, cashback/loyalty and price comparison sites.

Total digital ad spend in 2015 of £8.6bn was up 16% YOY, its highest rate of growth for 7 years (source: IAB)

Even larger mobile growth was seen in the ecommerce sector, courtesy of the latest IMRG Capgemini eRetail Sales Index.  Monthly figures for March recently released show overall online sales growing by 11%, within which smartphone transactions grew by a huge 101%.  This meant that Q1 ecommerce sales increased by 15% YOY, nearly double the annual growth rate seen in Q1 2015.  Larger mobile screen sizes coupled with much improved mobile shopping experiences from a variety of retailers are no doubt hoping to drive this upturn.

Staying with ecommerce, but from across the pond, Amazon have recently announced that US customers can now choose to pay for Amazon Prime (their well established premium delivery service with added bonuses such as streaming service Amazon Prime Video) on a monthly basis.  Although it still works out cheaper overall to pay for 12 months upfront at $100 rather than $10.99 per month, it will be interesting to see how this helps to convert customers who are tempted but not willing to commit to a year’s subscription all at once.  Should this launch in the UK soon (at perhaps £8.99 per month rather than the annual £79) we can probably be fairly sure it's been a success.