Advertising Association Predicts 45% UK Adspend Growth

08 October 2002

The decade ahead will see a 45% increase in Britain's national advertising spend according to the latest Long Term Advertising Expenditure Forecast from the Advertising Association.

The AA says it has no illusions about the difficulties in forecasting expenditure trends across a long period and the forecast makes the point that a sense of perspective is vital when considering long-term trends. Especially, says the AA, after a period of recession when the sector usually suffers from exaggerated feelings of pessimism.

Pundits predict the end of growth in main media advertising with clockwork regularity – usually at the very point when the industry is starting to recover. Advertising expenditure has recovered from all previous post-war recessions, and the AA sees no reason why the recent slowdown should be different.

The latest forecast builds a coherent structure linking economic movements with advertising expenditures, and tries to distinguish the long-term trends likely to shape the economy in general and advertising in particular over the next decade. Into this framework the forecast fits recent advertising developments.

Even where it is impossible to be certain how significant a particular development may be, the report suggests what the long-term effects might be on more and less pessimistic assessments. It also discusses how soon one can begin to distinguish between major alternative possibilities.

The report concludes that there is a good chance of significant growth in media advertising expenditure over the next decade, as shown in the following table.

High and Low Forecast Options
(£m at constant 1995 prices)

High Options
2002: 11,000 (total); 7,557 (display); 3,443 (classified)
2012: 15,950 (total); 11,165 (display); 4,785 (classified)

Low Option
2002: 10,700 (total); 7,383 (display); 3,317 (classified)
2012: 12,750 (total); 9,257 (display); 3,494 (classified)

Even on the ‘low option’ overall real growth in media spend of 19% is forecast. On the more optimistic ‘high option’ real growth of 45% is predicted over the ten-year period. The data excludes internet and direct mail spend.

The full report is available to AA members at £495 (non-members £995) from WARC.

Data sourced from: Advertising Association; additional content by WARC staff