LONDON: The rate of growth of UK advertising expenditure halved from the second to the third quarter, according to data from the Advertising Association and Warc, while full-year forecasts have been revised downwards
A slowdown in the third quarter was expected after the boost to figures given by the FIFA World Cup earlier in the year. The latest data from the Advertising Association/Warc Expenditure Report – a definitive measure of advertising activity in the UK, being the only source that uses advertising expenditure gathered from across the entire media landscape – show that UK adspend grew 4.2% to reach £4,307m, or half the 8.5% figure registered in the second quarter.
At the same time, AA/Warc revised down their annual forecasts in the light of a more cautious outlook for UK GDP and renewed concerns over the eurozone. They are now predicting 2015 adspend growth of 5.7% (down from 6.5%) with full year 2014 forecasts adjusted down from 6.4% to 5.8%.
Despite the more conservative projections, 2014-2015 will be the strongest consecutive growth years for UK adspend this century. "Two years growth at twice the rate of the economy is hardly a recipe for pessimism but adspend isn't immune to pressures on other sectors," said Tim Lefroy, chief executive of the Advertising Association.
Internet advertising continues to be the fastest growing area, with adspend up an estimated 13.1% in the third quarter to £1,753m. AA/Warc anticipates overall growth of 14.8% in 2014.
Within that, mobile advertising leads the way, with growth for the full year expected to be 56%, a total of £1,594m.
Broadcaster VOD is also growing fast, albeit from a low base. Spending here is projected to reach £160m in 2014, or 3.2% of all TV adspend. This represents year-on-year growth of 27% and that rate of growth is expected to pick up in 2015 to just over 31%.
There is a similar picture at newsbrands, where 2014 digital advertising expenditure is anticipated to increase 15.7% among nationals and 22.8% among regionals. The sums involved, however, are yet to reach a level that will offset print losses.
TV spot advertising performed steadily, up 3.8% year-on-year during the quarter, with adspend totaling £1,001m. Overall an increase of 6.0% is predicted for 2014, with adspend at £4,486m.
Radio (excluding branded content) enjoyed a strong third quarter, with the retail, industrial and government categories all increasing spend. Overall AA/Warc expect an annual increase of 8.9%, radio's best performance since 2000.
Data sourced from Advertising Association, Warc