As always, it was a huge year in the UK digital space and one full of change in 2017.
UK advertisers spent around £3.4Bn on programmatic, an increase of nearly 24% over 2016. Across all digital, spend was up 11% to roughly £10.9Bn, whilst traditional media continued to plateau. Mobile’s growth has been a key driver for much of this, increasing over 30% on 2016 – with mobile video spend up nearly 50%.
The duopoly continued to swallow up much growth. Facebook took an estimated £1.9Bn in UK ad revenue this year, largely driven by Instagram’s success and their investment in video. Google remained the dominant player, taking an eye watering £4.4Bn in 2017.
With December ended and a new year upon us, it’s time to speculate on the emerging trends we’ll see come to fruition in the coming year.
But rather than throw out buzzwords and tell you that AI will revolutionise marketing as we know it, or how much disruption AR will bring, our trends, (from Regital platform GWI) focus on what the data have to say.
Get to know Gen Z (16-20 year olds)
Speaking of buzzwords, 2017 saw the use of ‘Generation Z’ enter the mainstream. They may be similar in age to younger Millennials and this is reflected in some of their online behaviour. However, there are some notable differences and emerging trends we can see becoming apparent between the two groups.
Gen Z have become the first generation to reach the mobile tipping point globally- that is they spend more time on mobile than all other devices combined.
Here in the UK, Gen Z are no exception. 48% are spending more than three hours a day online on their mobile, compared with 35% of Millennials and 20% of all UK internet users aged 16-64.
That’s not to say PC/ Laptop/ Tablets should be ignored. 60% of Gen Z are spending more than three hours a day online on these devices.
Gen Z’s daily time spent online on mobile, indexed against the total UK population
Social, social, social
A whopping 44% of Gen Z are spending more than 3 hours a day on social networks- a figure that’s 28% for Millennials and 20% for all UK internet users aged 16-64.
Gen Z are 1.5x more likely than the UK average to utilise social as a product research channel, with 28% stating it’s their most important one.
Top brand research channels:
As we’re about to see it’s not just the research phase of the purchase journey where social is gaining traction.
(For an in depth look at Gen Z, please get in touch to request the full report).
Social commerce is gaining notable traction in many parts of Asia, however, in the West it hasn’t seen a comparable spike in popularity, yet. Facebook has learnt that adding a ‘buy now’ button doesn’t automatically shift the platform into a purely commerce focused platform.
Although there are certain trends we can observe which show social media users are not only using social more, but using it to satisfy diversifying needs.
Mobile, which accounts for 80% of time on social, is now the UK’s most important device. 86% of UK digital shoppers have made a purchase via mobile, an activity which many used to reserve for desktops. With the rise in mobile commerce the expectation is social will follow.
UK device importance over time:
31% of UK internet users follow brands they like on social, a figure which rises to 46% for Gen Z. Platforms themselves are adapting to this shift in behaviour too, with Pinterest releasing their ‘Lens’ product and Instagram’s new ‘tap to shop’ feature. This use of social could be seen to be driving up time spent on social.
Daily time spent on social media:
The UK is slowly catching up with the global average of two hours fifteen minutes spent on social- the UK currently stands at two hours one minute on average.
UK trend showing % using social to research/ find products to buy:
The UK is slightly behind the global average in terms of the number of users using social to research/ find products to buy, the global average stands at 28% whilst the UK can be seen at 21%.
Rising adblock usage, increasing use of social and users turning to social as a phase in their product research all point towards social commerce becoming a strong trend to watch in 2018.
Sports’ Online Revolution
As is the case with many of 2018’s trends to watch, sports’ online revolution is fuelled by younger age groups. In the UK, Football and Boxing are the most popular sports, with 18% and 13% of millennials watching each online, respectively.
Audience % using social to watch/ follow sports events, by age:
This year’s stats have shown that half of internet users are watching sports coverage online each month. And the cable providers are feeling this mounting pressure; Sky TV and BT Sport have signed a deal to air each other’s channels next season to compete with pure digital players.
Asia Pacific is firmly in the lead in terms of watching a variety of sports online, with the average APAC internet user watching 3.2 sports online, compared with just 1.1 for their European counterparts.
Globally, users are watching around twice as many sports on the big screen as they are online. Although whether online sports coverage is a replacement or a compliment to traditional ways of watching sports is yet to be confirmed. But it’s not just sports viewing that’s turning online.
Devices used to watch TV in any form:
Looking at the generational differences in how we consume TV here in the UK, it’s apparent that the amount of content we consume is increasing. More importantly, the way in which we are consuming TV is seeing huge changes.
As seen in section 1, Gen Z have reached the mobile tipping point. Looking at their TV behaviours, here in the UK it looks they’re about to reach another- watching television on their PC/ Laptop more than their TV.
Devices used to watch TV in any form in past month by generation:
Do smart consumers want smart homes?
Arguably, 2017 could be viewed as the year of ‘smart products’. Although the most popular products like Amazon Alexa and Google Home were released before 2017, their uptake and popularity have grown significantly over the last 12 months.
Assuming this is the beginning of a long lifecycle for these types of products, there is huge potential in this market. 2 in 3 UK consumers currently don’t own any smart home products- but 10.3M respondents stated they plan to purchase a smart home assistant, this isn’t including any of the other four smart products listed above.
Recently, Regital profiled current smart assistant users. Far from being the early tech adapters you’d expect, we found that the audience split is a lot more diverse. More owners have children than don’t, more are married or in a relationship than single- hinting they’re products built around offering family convenience.
The mobile payments race
Another trend with a firm uptake in APAC which is gradually moving its way further West is that of mobile payments. In China, for example, a huge 46% of internet users have paid for an item using their mobile in the last month. Whilst this number may only be 26% in the UK (as of Q3 2017), it was less than half of that amount in Q4 2015.
Uptake in using phone to pay for a product across UK:
As the second chart here demonstrates, this uptake in the UK is clearly driven by younger generations, a sure sign it’s here to stay and only increase.
Used phone to pay for an item/ service by age:
Currently, Apple Pay have the lion’s share of the market, with 8% of UK internet users having used the service in the past month- a number which spikes to 11% and 13% for Millennials and Gen Z respectively.
They’re not the only players though, PayPal One Touch, Android Pay and Amazon Payments all have similar figures of users (roughly 5% of UK Internet users adopting each). With this market in relative infancy, it’s safe to assume competition in this market will only increase over the coming months and years.
The advent of social music:
Somewhat surprisingly, the UK trails quite far behind the global average when looking at the percentage of internet users who have used a music streaming service in the past month. The global average is 63%, whilst the UK average is 49% (5 percentage points above Europe’s average).
Hours a day spent engaging with/ connected to music streaming services:
However, as seen with most of trends thus far, the younger generations are proving to be the exception. 82% of UK Gen Z have used a streaming service in the past month.
% who have used a music-streaming service in the past month:
Looking at these figures, especially on a global scale, it’s unsurprising that social networks are eyeing up this space. Facebook purchased Source3, a startup whose tech recognises, organises and analyses branded intellectual property in user-generated content. Furthermore, they hired YouTube’s former director of music partnerships- showing their intention in this area. And it’s unsurprising when we see that over half of UK Gen Zers are following musicians on social.
Is the influencer marketing boom sustainable?
With the well documented rise in adblocking over the past few years, it’s unsurprising that many major brands turned to influencer marketing to reach their audience- especially younger ones.
Some brands have seen major success with influencers, though the figures here suggest it’s still very much a compliment to other marketing channels. Influencer marketing seems to pale in comparison to TV and online advertising as a brand discovery channel. However, with higher and growing popularity amongst younger audiences, it can’t be ignored by brands targeting that age group.
Brand discovery by age (comparing: TV, online, influencers):
And finally, whether you like it or not, GDPR is inescapable. Coming into effect May 2018, it’s the ‘most important change in data privacy regulation in 20 years’ according to the EU. Looking at the chart, we can see that data concerns are showing the greatest disparity between generations and less so as a trend as the years go by.
Whilst Baby Boomers are about 10 percentage points more likely to be concerned with how their personal data is being used when compared with Gen Z, it is still more than 50% of each generation with these concerns- highlighting the need for GDPR and the transparency it will bring.
% who agree that ‘I worry about how my personal data is being used by companies’, by generation:
And there you have it, from generational differences to uptake of new tech, from behaviour change to policy change, these are our trends to watch for 2018. There are of course countless areas we could have speculated on going into the new year – and we will continue to over on the Regital blog.
If you’d like to know more about any of our trends to watch, or see how we can deep dive into your audience and give you data led insights, please get in contact.