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Online formats now account for over three-quarters of UK ad spend
United Kingdom
Advertising expenditure & forecasts
Strategy
The UK’s ad market grew 6.1% in 2023 to reach £36.6bn, according to the latest Advertising Association/WARC Expenditure Report, with online formats accounting for 78.4% of that total.
But after factoring in inflation, that growth equated to a 1.2% contraction in real terms.
Key stats for 2023
- Online formats combined grew by 11% to reach a total of £28.7bn.
- Out-of-home (+9.7%) was the only other advertising medium to record growth in 2023.
- All main media contracted: TV (-8.9%, although BVOD was up 15.9%), radio (-3.3%), national newsbrands (-6.3%), regional newsbrands (-10.1%), magazines (-9.1%), cinema (-4.2%).
- The only major product sectors to record rising display ad spend (i.e. excluding search and classified formats) last year were retail (+5.0%) and services (+4.7%), the latter almost entirely attributable to a 6.6% rise in the entertainment & leisure sector.
- 2023’s Q4 Christmas ad season topped £9.7bn after achieving growth of 7.4% year-on-year.
- Q4 growth was led by digital out-of-home (+18.1%) and BVOD (+15.9%) as well as search (+12.9%), as the traditional uplift in Golden Quarter investment was buoyed further by increased advertising activity during the Rugby World Cup.
Looking ahead
- The UK advertising market is forecast to grow 5.8% in 2024 to reach nearly £39bn, and by a further 4.5% in 2025 to top £40bn.
- Broadcast media, most notably TV (+2.6%) and radio (+2.3%), are expected to return to growth in 2024.
- Among digital formats, search (+8.9%) and online display (+6.4%) are again set to see the strongest rises, closing the year with a combined share of 77% of all spend.
- More favourable economic conditions should encourage advertisers to invest more in brand-building campaigns in 2024 and this, coupled with short-term stimuli such as the Men’s Euros in June, the upcoming General Election in the second half of the year and, to a lesser extent, the Paris Olympics in July, are expected to contribute to healthy growth in formats such as broadcaster video-on-demand (+14.1%) this year.
Sourced from Advertising Association, WARC
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