MAY 2022

Bill Fisher

UK Ad Spending
2022
Social and Video Command the Spotlight as TikTok Ad
Revenues Surge

Contributors: Wendy Louie-Lam, Paul Verna, Karin von Abrams, Debra Aho Williamson
 UK Ad Spending 2022: Social and Video Command the Spotlight as TikTok
Ad Revenues Surge
Digital ad spending is dominant in the UK, accounting for 77.2% of the total media ad market—the second-highest share
worldwide, behind China. Despite a gloomy economy, we anticipate good health for the UK digital ad industry, as many
segments, including social and video, will grow by double digits.

3 KEY QUESTIONS THIS REPORT WILL ANSWER

1 How much will be spent on digital advertising in the UK

this year?

2 How have the dynamics of social network

spending changed?

3 How big is the digital video advertising opportunity, and

which subcategories will benefit most?

WHAT’S IN THIS REPORT? Our latest estimates for digital

and total media ad spending in the UK. It also features
some of the biggest influences on the space, as well as
how changes in video and social network spending could
affect marketers.

KEY STAT: Digital ad spending will see growth of 11.9% this

year—down significantly from the remarkable 36.0% surge
in 2021, but a strong rise nonetheless. Growth will then slow
through the end of our forecast period in 2026, when spend
will approach £35 billion ($48.13 billion).

Contents
2 UK Ad Spending 2022: Social and Video Command the
Spotlight as TikTok Ad Revenues Surge
3 Key Points
3 Impact of the Ukraine Conflict and Market Instability
4 Recovery in the Ad Market Continues, with Double-Digit
Growth in Digital
6 TikTok and Instagram Are Propelling Overall Social
Network Ad Spending
8 The CTV Opportunity Looks Appealing, but It’s Limited
10 What Do These Forecasts Mean for Marketers in the UK?
11 Read Next
11 Sources
11 Editorial and Production Contributors

Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 2

 Key Points What’s Inside
This report contains our latest forecasts for ad spending
■ Digital’s dominance of the ad market is absolute. in the UK through 2026. It includes our estimates for the
Even before the pandemic supercharged digital following areas:
behaviors for UK consumers, marketers relied on digital ■ Total Media Ad Spending
platforms to tout their wares. In 2019, a little over
■ Traditional Media Ad Spending by Media Type
two-thirds of all media ad spending went to digital. And
■ Digital Ad Spending by Format
in 2024, about 8 in 10 advertising dollars will head in
that direction. ■ Mobile Ad Spending

■ TikTok advertising is taking off, while Instagram

continues to prove its worth. TikTok is on a roll, with Behind the Numbers
ad spending on the platform set to eclipse ad spending Our forecasting methodology for UK ad spending is based on
on Twitter and Snapchat combined. For so long, social an analysis of 2,525 data points from 49 sources—including
network advertising has been all about Facebook. macro-level economic conditions; historical trends of the
But this year, Instagram will overtake Facebook in ad advertising market; historical trends of each medium in
spending for the first time, as marketers look to engage relation to other media; reported revenues from major ad
users across age cohorts. publishers; estimates from other research firms; consumer
media consumption trends; consumer device usage trends; and
■ Video is still a driving force for digital ad spending, interviews with executives at ad agencies, brands, and media
but the connected TV (CTV) opportunity remains publishers, as well as other industry leaders.
unclear. Video is already the major portion of digital We do a bottom-up analysis of the market, taking into account
display ad spending, and it’s set to get even bigger. each company’s ad revenues. This information comes from
There’s also a lot of interest in the CTV opportunity— quarterly earnings releases, annual shareholder documents,
but it appears to be relatively small for now, while and statements from the executives in earnings calls. Company-
marketers figure out the best way to approach specific data is also evaluated alongside estimates from
this space. third-party research firms and interviews with executives at
ad agencies, brands, and media publishers and other industry
leaders covering these companies.

Our complete estimates for UK ad spending can be found in this

report’s accompanying spreadsheet.

Impact of the Ukraine Conflict

and Market Instability
The forecasts and trend analyses in this report
collection take into account the economic effects of the
Russia-Ukraine war. We have adjusted our estimates to
reflect changing conditions in Russia and in the rest of
Eastern Europe, as illustrated by the dual scenarios for
this region in the “Worldwide Ad Spending 2022” report.

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Our global ad spending update also incorporates several
factors that led to the recent upheaval and market instability
in the technology sector. Those factors include inflation,
adjustments to baseline interest rates, shifts in consumer
confidence, and fast-changing supply chain conditions.
While our forecasts were finished prior to the release of
companies’ Q1 2022 earnings, the factors that led to many
disappointing results were accounted for, and we do not
expect significant divergence from these forecasts in the
near term.

Recovery in the Ad Market

Continues, with Double-Digit
Growth in Digital
Even during the height of the pandemic, digital ad
spending in the UK performed incredibly well, which
meant total media ad spending only saw the slightest
of declines. As society began to open up through 2021, Digital will account for just shy of 80% of all media ad
digital spend accelerated quickly, and growth will spend by the end of 2024. All other traditional channels
continue for the next several years. are being dwarfed by this share. Even the second-biggest
advertising channel, traditional TV, will account for only
14.3% of total media ad spend in 2022, and that will shrink
Digital Is the Driving Force of the to just 11.4% in 2026.

Ad Industry
Digital ad spending will reach £25.84 billion
($35.54 billion) in the UK in 2022. This will be off the back
of strong 11.9% growth. While this rate will be lower than
the spectacular 36.0% surge in 2021, it still represents a
significant uptick, as the UK’s advertising industry continues
to rely more heavily on digital routes to market.

Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 4

In 2019, the digital share was about two-thirds (67.8%). This
was significant, but it’s nothing on the 79.7% we expect to
see in 2024.

Only China will see a larger proportion of total media

spend allocated to digital during our forecast—81.5% in
2022, rising to 86.7% in 2026.

Digital spending in the UK is so significant because

commercial TV plays a less prominent role in
advertising. The presence of the ad-free BBC is a primary
factor here. Almost a third of TV viewing time is spent
on BBC channels, according to Broadcasters’ Audience
Research Board (BARB). It doesn’t make TV any less
powerful as an advertising medium, but it does narrow
reach—especially when compared with a market like the US,
which has several major ad-supported networks.

Traditional Media’s Renaissance Will

Be Short-Lived
Digital spend isn’t the only growth story for 2022, with all
media except print seeing increases in spend. However,
much of this growth will be substantially smaller than what
we saw in 2021, when the markets righted themselves
following steep pandemic drops in the previous year. The one
OOH spend will see double-digit growth this year and
exception will be out-of-home (OOH) spending.
next. The early stages of the pandemic had an outsize
effect on this format, as cinemas were closed and the
population was locked down at home for large periods of
time, hindering large-scale retail, roadside, and transport
ad locations. This year has seen the complete reopening of
society, and OOH has benefited greatly.

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That said, the strong double-digit growth in OOH spending TikTok and Instagram Are
this year and next won’t help the format recover to pre-
pandemic levels. That will happen in 2024, and even then, Propelling Overall Social Network
growth will have slowed to a near crawl. Ad Spending
TikTok has quickly become a significant advertising
Digital OOH Categorization
platform, and its ascent doesn’t show any signs of
In the UK, digital OOH (DOOH) accounts for nearly twice as
much ad spending as traditional OOH. However, we currently stopping. We forecast the platform will experience its
include DOOH in our overall OOH total, rather than adding it third consecutive year of triple-digit growth in digital
into our digital ad spending figures. ad revenues in 2022. This growth will underpin a jump
The differences between digital and traditional placements in overall social media ad revenues that will exceed
when it comes to OOH aren’t as marked as they are for other Google’s total ad spend by the end of 2024.
media. The trading of DOOH media is also best described as
“automated” rather than programmatic. As such, we continue to
keep DOOH separate from our digital ad spend numbers.
TikTok’s Rapid Growth Will Put Twitter
Future growth for all traditional formats will be limited and Snapchat in the Shade
or nonexistent. Radio ad spending may have had a TikTok will earn more than Twitter and Snapchat
strong rebound in 2021, but it will start to see a decline in combined from digital advertising this year, per
2023 and beyond as digital audio begins to gather pace. our inaugural ad spending forecast for the platform.
Meanwhile, print media hasn’t seen any kind of recovery and A phenomenal growth rate of 190.2% will see total ad
will continue to face tough market conditions throughout revenues reach £0.75 billion ($1.04 billion) in 2022. And
our forecast. Even TV, which had a positive 2021 and will that total will almost double in 2024, at which point TikTok
continue to see growth in spending this year, will struggle to revenues will account for 4.7% of all digital ad spending.
attract extra revenues through the end of the forecast. Both Twitter and Snapchat will continue to see growing ad
revenues, but at rates far behind that of TikTok for most of
The digitization of traditional media is attracting the forecast period.
eyeballs—and ad dollars always follow eyeballs. This
is an inescapable fact. Traditional print spend has moved
in line with news brands’ shifts to digital. And, as we’ll see
in the next section, TV broadcasters are beginning to rely
on broadcaster video-on-demand (BVOD) to keep their
revenues in the black.

The movement of spend away from so-called “traditional”

media often results in a shift to adjacent digital properties.
Newspapers become digital news sites. TV broadcasters put
greater weight on their BVOD or other digital video services.
Radio moves to digital audio platforms.

Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 6

TikTok’s ad revenue growth is even outpacing user
growth. It makes sense that a nascent social media platform
like TikTok would begin to attract advertising dollars as it
gained a bigger audience. And the audience is definitely
growing at quite a clip: There will be 17.5 million users in the
UK this year, up from a mere 4.9 million in 2019, before the
pandemic attracted swathes of housebound users looking
for something to do during lockdown.

But the growth in advertising revenues is even more

impressive. While users will grow by double digits this year,
ad revenues will grow by triple digits. This speaks to the
elements of TikTok that make it a fierce competitor:

■ Its broad user base. TikTok’s appeal has expanded

beyond the youngest age groups. Double-digit
proportions of UK internet users ages 15 to 64 said they
used TikTok to watch short-video content, per a May
2021 Office of Communications (Ofcom) study.

■ Its algorithm. TikTok serves videos according to

a content graph, rather than a social graph. This
means users see videos based more on what they
have previously viewed and liked than on who
they follow. This allows brands to get in on the
Instagram’s growth is derived from strong audience
conversation organically.
figures across all age groups. While Facebook continues
■ Its appealing format. Branded videos on the platform to struggle with younger users (ages 34 and under) leaving
sit seamlessly next to user-generated content, making the platform, Instagram will maintain growth across all age
for an unobtrusive user experience. groups. Marketers covet younger users in particular, so the
maintenance of growth in these cohorts is what’s keeping
Instagram’s revenues looking so healthy.
For more on this topic, watch for our upcoming report “TikTok
Marketing in the UK,” publishing in June.

Social Ad Spending Will Rise—and

Instagram Is Witnessing Rapid Overtake Google
Growth, Too TikTok may be the major story in ad revenue growth, but
Instagram will overtake Facebook as the main platform when put next to the market leaders, Google and Meta, its
in Meta’s stable. This year will mark the first time that share of the market is far less impressive.
Instagram’s ad revenues will exceed those of Facebook, and
the gap will continue to widen through our forecast.

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Google’s share of the digital ad market will recede, The CTV Opportunity Looks
and Meta’s will rise. Our forecast shows a slight decline
in Google’s share, from 36.4% this year to 34.9% in 2024.
Appealing, but It’s Limited
Meanwhile, Meta will account for 26.1% of total digital ad
spending this year, and that share will increase to 28.4% While traditional TV ad spending will struggle for
within two years. growth in the coming years, digital video will not. A
portion of digital video spend will go to the nascent
Social media will become more popular than Google as CTV space, but traditional broadcasters are also
an advertising destination. In 2024, total ad spending developing their own streaming services (with BVOD
on social platforms will surpass Google’s ad revenues
ad spend rising at a far faster rate than traditional TV
for the first time. Social network ad spending will grow
20.0% this year, while Google’s ad revenues will grow by spend). Overall, the advertising opportunity for CTV
just 9.0%. This theme will continue through our forecast: remains small.
By 2024, social network ad spending will total £11.49 billion
($15.80 billion), and Google’s ad revenues will total
£10.69 billion ($14.70 billion). CTV Will Have Little Impact on the
Strong Growth in Digital Video
Ad Spending
Digital video advertising continues to rise in
prominence. It already accounts for more than half of
total display ad spend—56.0% this year, rising to 60.5% in
2026. Display ad spend, meanwhile, overtook search as the
biggest piece of total digital spend for the first time in 2020.

There’s simply more room for growth in social. With

platforms like Instagram and TikTok still growing their reach
in the UK—TikTok, albeit, from a very small base—it stands
to reason that advertising spend should similarly increase
with it.

Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 8

These patterns of growth will continue through our forecast The Ad-Supported BVOD Proposition
period and will result in digital video claiming a third of all
digital ad spending by 2026. Is Promising but Proportionally Small
BVOD spending is on the up, nearly doubling in size
Mobile remains the primary growth engine for digital between 2020 and 2026. However, even by the end of the
video. Mobile video ad spending will constitute 80.2% of all forecast period, it will total just £907.1 million ($1.25 billion).
digital video spend this year. Desktop and laptop spending, This is compared with traditional TV’s £4.85 billion
which includes CTV as a subcategory, will account for the ($6.67 billion). BVOD’s share of combined TV and BVOD
remaining 19.8%. Please note that we don’t currently break ad spend, though still small, will rise from 12.6% this year to
out CTV ad spend as a separate category in the UK. 15.8% in 2026.

Over the rest of the forecast, mobile’s share will increase—

reaching 82.9% by 2026. This isn’t to say that growth in
desktop and laptop spend won’t be significant—in fact, it will
be in the double digits this year and next. But mobile growth
will be stronger and longer lasting.

CTV thus equates to only a small fraction of the digital

video opportunity. The first thing to consider with CTV
in the UK is that a lot of video content consumed on
these devices doesn’t carry advertising. In February 2021,
subscription video-on-demand (SVOD) made up 62% of all
TV streaming, BVOD made up 19%, and YouTube made up
the other 19%, according to BARB data cited by Thinkbox.

In our forecasts, YouTube ad spend isn’t broken down by

device, so we can’t yet discern how much of YouTube’s ad
revenues are attributable to CTV. Meanwhile, other ad-
supported video-on-demand (AVOD) services in the UK are
tiny in terms of reach. So, that leaves us with BVOD as our
closest approximation to CTV in the UK.

Netflix Subscriber Losses and the AVOD Proposition

Netflix recently reported that it had seen a fall in subscribers
for the first time in more than a decade. This is by no means a As time spent with linear TV declines, broadcasters are
death knell for SVOD services in the UK, but it has started up
looking to BVOD to pick up some of the slack and help them
the familiar discussion about Netflix potentially offering an ad-
maintain their ad revenue streams.
supported tier. Disney+ is already set to launch such an option in
the US later this year, so the future for AVOD services may get a
bit of a leg up.
Looking across the whole TV spectrum, BVOD will drive
ad revenue growth. While traditional TV ad spending
This isn’t to say that the CTV opportunity is any bigger than we grew 35.0% in 2021, this was following a 14.4% decline in
currently predict. But further strains on household finances in
2020 as the pandemic wrought havoc. BVOD growth, on
the UK may have a positive impact on the space in coming years.
the other hand, remained positive in 2020 and will outstrip
TV ad spend growth from this year through the end of our
forecast period.

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 Consider “adjacent” digital media in your spending
plans. In many cases, audiences are digitizing traditional
behaviors. Traditional TV viewers, for example, haven’t
stopped watching TV-like content—they’ve just shifted
much of their viewing over to digital platforms. You’ll need to
consider the advertising opportunities available on some of
these new digital platforms, though. Per the traditional TV
viewing shift, there’s a lot of new viewing happening in
ad-free environments.

A sophisticated strategy will be needed, but it will pay

dividends. It won’t be the case of simply taking money
budgeted for TV and giving it to CTV or AVOD—though
some reattribution like that would be wise. Instead, when
deciding how spend will be allocated, consider the complex
nature of the digital ecosystem and direct budgets toward
target audiences rather than specific media.

Instagram and TikTok Demand

As we noted earlier, though, a large proportion of BVOD time
in the UK is spent with the ad-free BBC. This diminishes Marketer Attention
advertiser reach considerably and is one of the reasons Facebook has been the go-to platform for many years,
why BVOD will remain such a small part of the wider digital but Instagram now represents the biggest opportunity for
video landscape. Meta—and for marketers. TikTok, meanwhile, has seen
rocketing growth in ad spend as marketers flock to the
newest platform on the block.
What Do These Forecasts Mean Instagram offers a large and well-distributed user base.
for Marketers in the UK? While Facebook continues to suffer declining user numbers
in the younger age groups, Instagram has managed to grow
Digital media properties continue to offer the biggest across all cohorts. It should therefore be a key component of
captive audiences for marketers. And with a far less any social media strategy.
influential TV advertising market in the UK, the digital
TikTok should not be an afterthought. TikTok’s short-
space has become a runaway leader in attracting
video format and content-driven algorithm make it an
advertising spend. But “digital” is a big bucket, and
attractive proposition for marketers looking to reach a young
marketers need to navigate the complex landscape and engaged audience. Leaning into the short-video trend
with care. would be wise.

Where Customers Go, Marketers Must Digital Video Is Too Big to Ignore, but
Follow, and Digital Media Offers the CTV Advertising Is Less Clear
Biggest Audiences Digital video advertising continues its charge and is now
This may sound obvious, but it bears repeating: Digital the most important category in display advertising. Much
accounts for such a large amount of ad spending because has been said about the potential of CTV advertising, as
that’s the best place to reach consumers. However, the biggest screen in the home gained greater prominence
audiences are incredibly dispersed—“digital media” is a large during the height of the pandemic. But this potential has yet
umbrella term with multiple subcategories. to be fully realized.

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Mobile remains the growth engine for digital video Editorial and
advertising. Digital video growth has been underpinned by
mobile, with the emergence of platforms like TikTok helping Production Contributors
to drive this trend.
Anam Baig Director, Report Editing
CTV advertising, at least in the form of BVOD, remains a Rahul Chadha Director, Report Editing
bit of a hard sell in the UK. BVOD ad spending is growing Jason Clinkscales Senior Report Editor
but will remain a tiny part of the bigger digital video picture. Matthew Corkins Copy Editor
A lot of other CTV content, meanwhile, will remain ad-free Justin DeVoursney Graphic Designer
in the country. Indeed, UK viewers are accustomed to an Joanne DiCamillo Senior Production Artist
ad-free TV experience, and these sensibilities are crossing Magenta Fox Senior Chart Editor
over into digital video habits, too. There’s clearly an Donte Gibson Senior Chart Editor
opportunity in the CTV space, but it may not be worth Katie Hamblin Director, Charts
spending too much time or money on just yet. Dana Hill Director, Production
Erika Huber Line Editor
Ann Marie Kerwin Vice President, Content
Kyndall Krist Copy Editor
Read Next Na Li Senior Data Research Manager
Penelope Lin Senior Copy Editor
UK Digital Video Viewers 2022: Audiences on Reuben Loewy Director, Report Editing
Connected TVs Represent Growing Opportunities Jennifer Merritt Executive Editor
for Marketers Stephanie Meyer Product Specialist
UK Social Network Users 2022: TikTok Is on a Rapid Heather Price Senior Director, Managing Editor
Rise, While Facebook Growth Is Stalling Erika Skorstad Copy Editor
Rachel Tatarek Senior Copy Editor
Amanda Woodman Copy Editor
Sources Julia Woolever Senior Report Editor
Ali Young Senior Copy Editor
Broadcasters’ Audience Research Board (BARB) – UK
Thinkbox
Office of Communications (Ofcom) – UK

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