Digital advertising grew by 17.3% last year to £10.3bn - the fastest growth in nine years - according to the latest IAB and PwC Digital Adspend report.

Mobile advertising accounted for 38% of all digital adspend, up 4% from five years ago. It also accounts for 63% of video spend and 76% of content and native spend.

In fact, spend on mobile video ads more than doubled (103%) to £693m – making it the fastest-growing ad format. It accounted for 29% of the total growth in digital adspend.

The rise in mobile video ad budgets is in tandem with consumer habits. In the last six months, 54% of British smartphones users watched video clips on their phone, with two in five of these saying they do more of this than a year ago, according to data from YouGov.

A growing number are also watching TV programmes (17%) and films (11%) on their smartphones. This is especially prevalent among 18-24 year olds with 75% watching short clips, 44% watching TV and 33% watching films on their mobiles.

Six in ten of all surveyed watched clips on their phones while "out and about". 

"The rise in people consuming mobile and video content has accelerated digital’s growth rate to its highest level for nearly a decade," IAB UK’s chief marketing officer, James Chandler, said. "It’s impossible to ignore the issues the industry is facing at the moment, but digital never stands still and these figures are a testament to the long-term strength and power of digital."

Video

Video advertising, across mobile and PCs, grew at 56% driven by outstream and social in-feed video's huge 234% rise to £465m. Outstream accounts for 43% of all video spend but 56% of mobile video. Pre- and post-roll video ad spend grew 12% to £603m (a 55% share of all video).

Outstream accounts for 43% of all video spend but 56% of mobile video. Pre- and post-roll video ad spend grew 12% to £603m (55% share of all video).

"Online video is becoming a bigger priority, providing an impactful and cost-effective incremental reach," Sebastien Bardin, Sony Mobile’s European senior digital marketing manager said. "In particular, outstream video is great for engaging with our target audience in premium, trusted and viewable environments without disrupting their media consumption or being too intrusive."

Despite YouTube's ongoing woes, IAB's Chandler is sure that digital advertising will not be impacted in the long term. "Of course, a lot of the attention around digital has been about the challenges, such as ad-blocking and brand safety but the fact remains that as consumers spend more time online, advertisers have to direct their attention and budgets there," Chandler said. 

On brand safety, he added that while one ad appearing in the wrong place is unacceptable, the actual incidences of this happening are "very small" especially when one considers the billions of ads served every single day. "To reduce the chances of this happening further, we advise only buying ads through companies that have successfully been audited against Jicwebs' brand safety certification programme" Chandler concluded. 

Programmatic

Last year, nearly three-quarters (72%) of display advertising was traded programmatically. Overall, display ad spend rose 26% year on year to £3.77bn in 2016.

"The biggest change in how display ads are sold is the rise of programmatic direct, which now accounts for nearly half of sales," Dan Bunyan, senior manager at PwC said. "Right now, considerations such as brand safety mean the advertiser is rightly demanding more certainty in the placement of their ads and the industry is evolving quickly to find new solutions to address brands' needs in this dynamic environment."