LONDON: UK advertising expenditure increased 5.2% to a record £10bn in the first half of 2016 despite economic uncertainty in the run up to the EU referendum in June, the latest Advertising Association/Warc Expenditure Report has revealed.
The growth rate was 0.4 percentage points ahead of forecast, fuelled in part by particularly strong growth in budgets allocated to the internet, including mobile.
It means the Advertising Association and Warc have now increased their full year 2016 growth forecast by 1 percentage point to 5.2%.
Overall internet adspend increased 16.9% to £4.8bn in H1 2016, with the mobile component growing 52.6% to £1.7bn. In addition – and for the first time – mobile now accounts for more than half of all online display adspend in the UK.
The Advertising Association/Warc Expenditure Report is the definitive measure of advertising activity in the UK. It is the only source that uses advertising expenditure gathered from across the entire media landscape, rather than relying solely on estimated or modelled data.
According to the report, digital formats thrived during the first half of the year, confirming that the trend towards digital and mobile is continuing.
Online video adspend increased 66.4% to £252m in H1 2016, while native adspend grew 29.9% to £451m. Meanwhile, digital out-of-home (OOH) adspend increased 28.9% to £176m, or just over a third of the total £511m devoted to all forms of OOH.
Turning to traditional media, the report found TV spot expenditure increased 2.1% in H1 to £2.4bn, although a weaker than expected performance in Q2 means the full year forecast for TV spot has been downgraded to 1.5% growth.
Radio adspend increased 0.5% in H1 to £242m and the sector is expected to record modest growth of 1.6% and 0.8% in 2016 and 2017 respectively.
However, print adspend is expected to continue to decline. Total ad revenue among national newsbrands is forecast to dip 9.3% in 2016, and 10.4% in 2017, while ad revenue for regional titles is forecast to reduce by 10% in 2016 and 8.4% in 2017.
Similarly, advertising revenue for all magazine brands is forecast to decrease 4.3% in 2016 and 5.5% in 2017.
But with the data pointing to strong internet revenue growth, Tim Lefroy, Chief Executive of the Advertising Association, expressed confidence about the outlook for the industry, although he indicated that the Brexit referendum result could have implications.
"Investment in UK advertising remains strong this year, and the trend towards digital and mobile continues – but the medium term is more complex," he said. "The Government should avoid any regulatory uncertainty that might affect advertising's stimulus to the economy."
Data sourced from Warc, Advertising Association