UK ad spend to exceed £29bn this year

UK ad spend is expected to hit a record £7.9bn in Q4, according to the latest Advertising Association/WARC Expenditure Report forecast; figures for the full year are now projected to be £29.3bn, representing annual growth of 24.8%.

Why it matters

The UK is on course to achieve the fastest ad trade recovery of any major European market this year. The data proves advertising’s role as “a vital engine for growth in the UK economy”, says Advertising Association chief executive Stephen Woodford.

Takeaways

• Double-digit recovery confirmed in Q2 2021

Actual figures show advertising spend rose 86.5% to reach £7.7bn in Q2 2021, underlining a strong recovery following the unprecedented disruption during the first wave of Covid-19 last year, when UK ad spend fell by 34.1% in Q2 2020 at the height of the nation’s first lockdown.

All media saw a strong recovery in Q2 2021, led by sectors such as out of home (+276.8%), digital magazine brands (+155.5%) and direct mail (+104.0%) as the nation emerged from the third coronavirus lockdown. While the half-year figures show a slower recovery for newsbrands, their online ad revenues still saw a double-digit growth (+22.2% national digital and +28.0% regional digital).

• Christmas ad spend led by online shopping

Forecast Q4 spending of £7.9bn is the highest level ever recorded during the Christmas period and £929m more than last year. Search (+15.3%) and TV (+9.0%) will be the big winners; in particular, broadcaster video-on-demand will be up by a quarter (24.1%).

• Continued strong growth seen in 2022

Revised projections for 2022 show a 7.7% increase year-on-year to more than £31.5bn. Media channels set for a significant recovery following the Covid-19 pandemic include cinema (+123.2%) and out of home (+27.7%), while the growth in search, which includes e-commerce spend, is expected to continue its rise (+11.4%).

WARC says

“Strong fourth quarter projections for TV, a medium heavily leveraged by retailers during the golden quarter, and search, which encompasses activity on e-commerce platforms, suggest it will be largely business as usual for the industry this year” – James McDonald, head of data content, WARC.

A subscription to the AA/WARC Expenditure Report includes access to an executive summary report analysing the latest trends and investment data available to download in Excel format. More information is available here.