LONDON: UK advertising expenditure grew 3.7% to £10.8bn during the first six months of 2017, the largest first half total of any year since monitoring began in 1982, according to the latest Advertising Association/WARC Expenditure Report.

Consequently, the forecast for the full year has been upgraded from 2.0% to 3.1% growth, indicating an annual spend in excess of £22bn.

The reason lies with the speed of growth of digital advertising, primarily mobile, which has advanced more quickly than first quarter estimates had suggested.

Digital – defined as internet and digital out of home (DOOH) – accounted for some £5.8bn in total, or 54% of all advertising spend in the first half of the year.

Mobile growth of 38.1% was the main contributor to a 13.8% rise in internet spend during this period.

Several other digital formats also performed strongly, including digital out of home (+29.1%), digital advertising formats for radio (+22.2%) and national newsbrands (+15.6%). Regional newsbrands delivered a 4% increase in digital spending but magazine digital spending declined 9%.

Television spending, meanwhile, fell 4.4% in the first half. The rate of decline is expected to ease during the Christmas period, but figures for the year are expected to be down 2.4%.

“The latest data highlight the importance of mobile to advertisers in the UK – spend on mobile ads accounted for the entirety of internet growth during the second quarter of 2017 and 97% over the first six months of the year,” said James McDonald, Senior Data Analyst at WARC.

“As mobile usage and credit-fuelled consumer spending continue to rise, investment in mobile advertising will track ahead of other platforms this year.”

The Advertising Association’s chief executive spoke of increased adpsend being “a cautious indicator for continued growth in the UK economy” but the latest GfK Consumer Confidence Index, released today, expressed concerns about the nature of that growth.

“Our enthusiasm for spending, as witnessed by the uptick in the Major Purchase Index, is more worrying than reassuring,” said Joe Staton, Head of Market Dynamics at GfK, as he noted “rising living costs, an imminent interest rate rise, and the reality that we earn less in real terms in 2017 than in early 2006”.

GfK’s October Consumer Confidence Measures show that people are increasingly gloomy about the general economic situation (-26) but remain relatively optimistic about their personal financial situation (+4).

Sourced from Advertising Association, WARC