UK adspend records increase

17 January 2013

LONDON: UK advertising expenditure in the third quarter of 2012 amounted to £4bn, a 0.8% increase year-on-year, and is expected to reach a total of £16.8bn for the year, according to new figures.

These data are included in the latest Expenditure Report from Warc and the Advertising Association, a comprehensive measure of UK advertising activity which also contains an overview of advertising spend by individual media.

TV, radio and press saw drops of 7.2%, 4% and 9.6% respectively during the quarter, but out-of-home grew significantly, up 25.4% to nearly £270m.

This was in part due to the 'Olympic Effect': as the Olympic Games were broadcast on the ad-free BBC, advertisers moved away from commercial TV and looked to other media.

Out-of-home is forecast to rise 8.7% for the whole of 2012 but to fall 2.8% in 2013 as the Olympic effect is removed.

Internet advertising continued to grow steadily, with an estimated increase of 10.9% in Q3. Overall spend for the medium is expected to have reached £5.3bn in 2012.

Cinema advertising also grew in Q3 2012 by 1.7%, with anticipated total spend of £187 million in 2012.

Tim Lefroy, Chief Executive at the Advertising Association, said: "Despite the shaky economic outlook, 2013 will see overall adspend return to levels last seen before the recession. That's good news for both UK advertising and UK plc."

Suzy Young, Data Editor at Warc, added: "Though expectations have been scaled back in line with the deteriorating economic outlook, we still predict growth of over 3% in 2013."

Elsewhere, the IPA Bellwether Report signalled a slight rise in marketing spend in the fourth quarter, as budgets were revised higher at 17% of companies, compared to cuts at 16%. The improvement was led by continued strength in internet advertising.

The report also revealed that marketing executives are cautiously optimistic about an increase in their budgets for 2013, relative to 2012 levels, while companies have grown more positive about their own performance.

Data sourced from Warc/AA/; additional content by Warc staff