Online ad growth in the UK continues to exceed expectations, helping deliver a 20th consecutive quarter of market growth in the April-to-June period and another upwards revision to the full year forecasts carried in the quarterly Advertising Association/WARC Expenditure Report.

UK adspend rose 6.4% year-on-year to reach £5.6bn in Q2 2018, according to the definitive guide to advertising expenditure in the UK, with overall market growth being driven by increased spend on online advertising.

Internet advertising – inclusive of online revenues for newsbrands, magazine brands, broadcaster video-on-demand and radio station websites – continues to grow at a rapid rate and consequently full-year projection figures have been upgraded by three and a half points to 13.3% growth this year, with 9.6% forecast for 2019.

James McDonald, Data Editor, WARC, noted this to be "the fifth upgrade to our forecasts in as many quarters". He added that, "barring any major shock to the system, [rising internet spend] should continue to play out over the years ahead, lifting total market value in tow.”

Data show that mobile accounted for over half of search spend for the first time in the second quarter. Further, display formats are also growing strongly – online video attracted half a billion pounds during the three months to end-June.

The TV market grew ahead of expectations in the second quarter of 2018, with total spend rising 1.9% to £1.2bn. Spot advertising – 89% of the total – rose for the third consecutive quarter, and the 1.4% growth rate was ahead of forecast.

Investment in radio (+1.9%) and out of home (+1.4%) advertising also rose during the period.

The figures come as the UK Government seeks to reach agreement with the EU on the terms of Brexit and are based on a positive outcome to negotiations, as is sought by both sides.

Margot James, Minister for Digital and the Creative Industries, welcomed the figures as evidence of the “huge contribution” the advertising industry makes to the UK economy. “Its international reputation for creative excellence is playing a vital role in helping to bang the drum for Britain abroad,” she said.

Advertising Association chief executive Stephen Woodford sounded a note of caution, however, stressing that upgraded predictions for 2018 and 2019 “depend on getting the right deal from Brexit negotiations and clarity on what the future will look like”.

For an industry so reliant on human capital, that will include greater transparency on the rights of EU citizens to continue living and working in the UK and whether and when freedom of movement will cease.

“We must ensure that the unique features that have made the UK the global hub for our industry, such as access to the best and brightest creative talent from across the world, are prioritised as we leave the EU,” Woodford said.

Sourced from WARC