UK adspend posts strong growth

8 July 2014
LONDON: Total adspend in the UK is forecast to increase 6% this year, rising to 6.7% in 2015, according to the latest Expenditure Report from the Advertising Association and Warc.

Their joint quarterly forecast, the most reliable data available on advertising activity in the UK, found total UK adspend increased by 5.0% in Q1 2014 to reach £4.44bn, up from the 4.5% growth predicted in April's report.

Strong performances from TV and radio, as well as an improving economic landscape, underpinned adspend growth in the first quarter and AA/Warc expects both sectors to record even better results in the second quarter as they benefit from the FIFA World Cup.

Spot TV ad revenue increased 6% in the first quarter to £1.1bn and is expected to grow to 10.5% in Q2 – on the back of budgets brought forward for the tournament – before slowing in the third quarter. AA/Warc forecasts a year-on-year increase of 6.5% in 2014.

Radio also posted a positive start to the year, rising by 5.7% in Q1 compared with the same period a year ago.

Growth in radio adspend is expected to accelerate to 7.6% in Q2 before slowing for the rest of the year while an increase of 4.4% is forecast for 2014, the sector's best performance since 2003.

Karen Fraser, strategy director at the AA, said: "This latest set of data shows the importance of global events such as the World Cup to advertising spend in the UK. Following a positive start to the year in Q1, Q2 is set to be a strong quarter for the sector, buoyed by the tournament."

Internet advertising also put in a strong performance. Total internet adspend, including mobile, grew an estimated 15.6% to £6.3bn in 2013 and is expected to grow by 14% in 2014.

Mobile, with a growth rate of 95.2% last year, is expected to continue to grow rapidly by 75% in 2014 before slowing to 47% growth in 2015.

And in a further sign of growing economic confidence in the UK, recruitment advertising showed improvement after recording 21 quarters of decline out of the last 25.

Recruitment adspend grew 3.7% in Q4 2013, and 2.6% in Q1 2014, putting it on course to reach £521m for the year.

Tim Lefroy, chief executive of the Advertising Association, expressed confidence in the state of the economy and paid tribute to the UK's performance in online and mobile.

"This latest adspend data are another nudge up for the economy, and a feather in the cap of UK global leadership in online and mobile, with consumers getting more value each day," he said.

Data sourced from the Advertising Association, Warc
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