UK ad market to grow 9.2% in 2022

The UK’s advertising market will grow to reach £35 billion by the end of this year, according to the latest Advertising Association/WARC Expenditure report, based on direct data from UK media owners across the entire landscape.

What’s going on

Although the 9.2% growth rate is strong, it constitutes a downgrade of 1.7 percentage points from July’s forecast of 10.9% reaching £35.4bn by year end. This is a result of inflation squeezing both companies’ input costs and customer wallets.

“Higher costs are carving into advertisers’ margins and household budgets alike, and trading conditions are at their worst since the Covid outbreak,” notes James McDonald, Director of Data, Intelligence & Forecasting at WARC. It's leading to “muted expectations” for the Christmas quarter, he adds. 

Read the executive summary of the findings here.

Looking ahead: Football and festivities

It’s set to be an extremely busy final quarter of 2022 as a winter FIFA World Cup leads into the vital Christmas season.

Despite the sporting event, linear TV is expected to remain flat at £1.7bn, while video-on-demand is set to grow ahead of the broader market at 4.2%.

Adspend is expected to rise, but not by a lot, even though a 4.5% year-on-year increase will, again, break a new record to take Q4 adspend to £9.5bn.

Search advertising is expected to see a lift from e-commerce’s renewed importance to Christmas shopping, growing 7.3% to reach £3.4bn.

2023 forecasts: slowing growth and online dominance

The market is expected to grow but at a slower rate of 3.9%, to reach a total of £36.2bn in 2023.

Online adspend in 2023 is expected to just cross the three-quarter threshold to reach 75.2%.

Deep dive on Q2

For Q2, advertising spend grew by 8.8%, contributing to a first half ad market growth of 14.4% to reach £16.7bn.

Certain channels experienced very strong growth over the quarter:

• OOH +46.4%
• Cinema +2,208%
• Broadcaster video-on-demand +9.3%
• National newsbrands +9.1%

TV, meanwhile, was the only medium that saw a decline in investment with a drop of 0.6%.