‘A new era of advertising’ | WARC | The Feed

‘A new era of advertising’

The UK ad market reached a record £31.9 billion in 2021, according to the latest Advertising Association/WARC Expenditure Report – significantly higher than the £24 billion forecast back at the start of the pandemic, partly because of inflationary pressures on the cost of advertising but also because of higher-than-expected growth in key forms of online advertising.

Why it matters

Alongside the latest AA/WARC Expenditure Report, published today, a separate study, UK Advertising’s Adspend Review: The Pandemic Effect, includes commentary from WARC which concludes that the changes seen in the advertising market during the pandemic allude to an emerging structural shift, with retail media poised to play a more prominent role in future. The review also notes the pandemic has seen a disruption in the usual relationship between GDP and adspend.

Takeaways 

• Internet adspend totalled £23.5 billion in 2021, equivalent to 73.5% of all UK adspend and a jump of 11.7 percentage points from pre-pandemic levels in 2019.

• Search, inclusive of e-commerce, proved to be the strongest performer in 2021 – at £11.7 billion it beats April 2020’s projection (made during the onset of the Covid-19 pandemic) by over £3.7 billion. 
• TV also surpassed early expectations by almost £1 billion, while online video overperformed by approximately £2 billion and social media by £2.3 billion in relation to the forecasts made at the start of the pandemic. 
• With online retail spend of $2,648 per capita, the UK has the world’s most avid online shoppers. In tandem, the UK ad industry is seeing an exponential demand for digital skills and talent to serve this demand.

Key quote

“The COVID-19 recovery last year was buoyed in part by the release of pent-up investment on established online platforms – as well as maturing ones such as TikTok – and in part by the emergence of retail media as a major contender for marketing budgets. The latter trend bears the hallmark of a new era in advertising, one which is set to fuel growth over the forecast period and beyond” – James McDonald, director of data, intelligence & forecasting, WARC.

Find out more about the latest Advertising Association/WARC Expenditure Report here.

Sourced from Advertising Association, WARC