LONDON: The UK advertising market is forecast to grow at a compound rate of 4.4% a year between 2013 and 2017 to reach £17bn, making it one of the fastest growing sectors of the entertainment and media industry, a new study has predicted.
The figures were revealed in the Global Entertainment & Media Outlook 2013-2017, from consultancy PwC, which estimated the total UK entertainment and media (E&M) market would grow 4% compounded annually from 2013 to 2017, eventually reaching a value of £65.5bn.
The fastest growing areas, the report stated, will be internet advertising, internet access, out of home advertising, video games and TV advertising.
The UK is already Europe's largest online ad market and it is expected to continue in this position during the forecast period. The online ad market was worth £5bn in 2012 and will grow to £8bn in 2017, a compound annual growth rate (CAGR) of 9.9%, said PwC.
France is currently Europe's largest out-of-home advertising market, with the UK second-placed but forecast to take the top spot by 2015. The channel is projected to grow from its current level of £930m at a CAGR of 6% to reach £1.24bn in 2017.
TV advertising in the UK was worth £3.7bn in 2012, with revenues expected to increase by a CAGR of 4.7% to £4.7bn in 2017. PwC predicted the UK would be a global leader in online TV advertising behind the US.
As regards other media, PwC said that newspapers, B2B publishing and consumer magazines would show a net decline in revenues over the period, while subscription television revenues would overtake the newspaper industry in 2017.
"Entertainment and media businesses have raised their game in agility and customer understanding and we see that a constant digital innovation has become the new licence to operate," said Phil Stokes, head of UK entertainment & media at PwC.
"Digital technologies are pervasive," he added, "and, as a consequence, we believe it's wrong to say that companies need 'a digital strategy': companies need a business strategy that's fit for the digital age."
Data sourced from PwC; additional content by Warc staff