Internet advertising is predicted to account for a quarter of all entertainment and media revenue by 2023, according to the latest Global Entertainment & Media (E&M) Outlook 2019-2023 published by PwC.
Internet ads are expected to bring in £20 billion in revenue within the sector up from £15 billion in 2019.
Mobile ad revenues will rake in more than double (£14 billion) the amount traditional Internet ads will attract by 2023 (£6.3 billion) and are predicted to account for three quarters of all Internet ad spend.
“The UK’s internet advertising market remains the largest in Western Europe and will grow to represent almost a third of the total Western European market in the next four years,” explained Mark Maitland, head of entertainment and media UK at PwC.
“Our internet advertising market is already mature owing to high levels of consumer connectivity, the growing centrality of smartphones and an apps-based environment has driven mobile ad spend to be greater than total desktop ad spend in the UK.”
Meanwhile, UK customers will consume more internet data than elsewhere in Europe with spending on internet data access rising from £14.7 billion in 2019 to £17.6 billion in 2023.
“The UK telecoms market is one of the largest in Western Europe, with intense competition in both the mobile and fixed sectors. Following the award of the first UK 5G spectrum in April last year operators are expected to launch services this year which will increase speeds for smartphone users. Across all devices video is the fastest-growing content type, increasing at a 22% CAGR. Video accounts for 84% of data consumption across devices in 2018, and this is expected to increase to 89% in 2023,” Maitland added.
At the same time, virtual reality presents as one of the dominant sectors in terms of growth with a 20% CAGR forecast. Although VR gaming leads the sector, VR video is a rapidly growing sub section of the industry estimated to be worth £294 million in 2023.
“Sales of VR units in the UK are currently modest but growing, with 2m units in total sold in 2018. This is expected to rise to 3.5m units in 2023. Venue-based VR is growing in the UK, offering an alternative for those who do not want to purchase headsets,” added Maitland.
The report also noted that podcast ads are expected to grow at a CAGR of 34% over the next four years to £66 million.