LONDON: Economic uncertainty surrounding the Brexit process will not deter the UK advertising industry, which will remain one of the world’s fastest-growing media markets in 2018, increasing 4.8% to £19.8bn according to the latest GroupM forecast.
This is an upward revision from the 4.5% growth it predicted six months ago. GroupM also anticipated that 2017 will turn out better than it previously thought, as it pushed its growth forecast for the year up from 4.1% to 5% and a total of £18.9bn.
The figures chime with the upgraded outlooks for the UK's ad market in the AA/WARC Expenditure Report, published last month.
Even if economic uncertainty is not having an adverse effect on the headline figure, it is shaping where spending is being allocated: ‘legacy media’, including its digital components, will shrink 4.4% in 2017 and a further 2.0% in 2018 according to GroupM.
At the same time, ‘pure play’ internet (which excludes digital revenues for legacy media owners) continues to grow – at 13.3% in 2017 and 9.8% in 2018 – and is forecast to hold a 60% share of all UK ad investment in 2018.
“The focus of marketers remains relentlessly short-term and arguably underweighted relative to long-term brand building in broadcast media,” said Adam Smith, GroupM’s Futures Director.
“This favours performance-oriented digital media which continue to be the most robust growth story despite concerns over measurement, transparency, brand safety and other issues”.
Digital may also be a victim of its own success, as Smith suggested that “the larger digital looms in share, the more vociferous and voluminous the challenge” around the above concerns will be.
In addition, the implementation of the European Union’s General Data Protection Regulation (GDPR) in May 2018, with new definitions of ‘personal data’ and new compliance rules (and penalties), may make marketers more cautious.
Television spending, meanwhile, is set to decline for the first time in five years in 2017, dipping 2.9% before flatlining in 2018.
The outlook for legacy media beyond television remains tough, said GroupM, with forecasts for out of home (OOH) growth in 2017 cut from 2% to zero, although it could see a 2% pick up in 2018. Newsbrands, both national and regional, and magazine brands continue to decline, albeit at slightly slower rates in 2018.
Sourced from GroupM; additional content by WARC staff