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UK adspend hits record high in H1

News, 20 October 2015

LONDON: UK advertising expenditure grew 5.8% to reach a record high of £9,424m in the first half of 2015, according to the latest Advertising Association/Warc Expenditure Report.

This increase was driven by strong performance in digital channels, especially mobile which leapt 52.1% to break the billion pound barrier in a half-year period for the first time, reaching £1,079m.

The Advertising Association/Warc 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.

Separate research from Warc's Adspend Database highlights the UK's leading position as regards mobile, as it is the highest spender on mobile advertising in Europe and the third highest spender globally, after the US and China.

Total UK internet spending grew rather more slowly, at 13.3%, and stood at £3,975m for the first six months.

Among other channels, TV spot advertising performed particularly well, increasing 7.1% year-on-year, despite 2014's boost from the FIFA World Cup. Forecast adspend for TV in 2015 has accordingly been revised upwards, to 7.1%.

Steady growth was also reported in the first half for radio (+2.9%), out of home (+2.3%), cinema (+2.7%) and direct mail (+4.5%).

Print revenues at national newsbrands print ad plunged 19.2% in the second quarter, leading to an 11.3% decline over the half; digital adspend, in contrast, was up 5.9% but at £51m these remain a small part of the total.

A similar pattern was evident at magazine brands, where overall adspend was down 5.4% between January and June.

Tim Lefroy, chief executive at the Advertising Association, pointed to the resilience of the advertising industry overall and said this reflected the strength of the broader economy.

"The UK leads the world in e-commerce and the trend to mobile means serving the public better – ads in the right place at the right time," he said.

Advertising spend is predicted to break the £20bn barrier in 2016, with a 5.8% rise in 2015 and a 5.3% rise next year.

James McDonald, research analyst at Warc, observed that "annual growth in advertising expenditure was recorded among the three largest media channels during the second quarter, while all others saw a decline.

"TV spot had a particularly strong performance at +2.9% compared to a quarter in which the FIFA World Cup was held last year. It's worth noting that over the first six months of 2015, TV adspend has grown at more than double the rate of desktop internet."

Data sourced from Warc