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UK adspend hit £21bn in 2016

News, 31 January 2017
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LONDON: The UK advertising market shrugged off Brexit concerns in the third quarter of 2016 as spending rose 4.2% to break £5bn, with full-year spending estimated to have risen 4.4% to top £21bn for the first time, according to latest figures from the AA/Warc Expenditure Report.

The data are significant as the Expenditure Report is the definitive measure of advertising activity in the UK, being the only source that uses advertising expenditure gathered from across the entire media landscape, rather than relying solely on estimated or modelled data.

"That adspend held up after the referendum is another marker of the strength of the UK's advertising and media industries," said Stephen Woodford, chief executive at the Advertising Association.

While overall spending increased in the quarter, some familiar trends were evident, as digital and mobile formats surged ahead of print.

Internet expenditure grew strongly, up by 15.3% to £2.5bn, boosted by a 45.6% growth in mobile spending, which stood at £994m; digital out of home spend also performed strongly, growing eight times as fast as the sector overall (24.7% v 3.1%).

Spending through national and regional newsbrands, however, continued to decline, by 9.0% and 14.7% respectively.

More unexpectedly, perhaps, TV spend increased 1.4% from a record-high Q3 in 2015, when the UK hosted the Rugby World Cup.

"Advertising on social platforms, particularly via mobile devices as native articles and videos, will continue to garner surging investment this year as marketers shadow media consumption habits," noted James McDonald, Senior Data Analyst at Warc.

"Yet despite this emerging trend, the TV spot, an industry staple, will remain the largest display format by spend in 2017," he added.

2016 was the seventh consecutive year of growth in the UK's advertising market and, with a further 3.2% increase forecast for 2017, the industry can be optimistic about the future.

But the specter of Brexit looms over everyone and advertising is concerned that its voice is heard at the highest level. "As the Government gears up for Brexit negotiations and a new industrial strategy, it must prioritise protecting this global advantage," said Woodford.

At last week's LEAD conference, Karen Bradley, the secretary of state for culture, media and sport, reassured the industry that advertising is seen as key to the country's post-Brexit success.

"The government is four square behind the advertising industry," she declared, as she repeated that the creative industries had their own focus in a government green paper on industrial strategy.

Readers can download a recent Warc report on Global Ad Trends here.

Data sourced from Warc, Advertising Association

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