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UK adspend growth forecasts hold strong despite Brexit vote, AA - Warc Report

01-February-2017
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UK adspend growth forecasts hold strong despite Brexit vote, AA - Warc Report

Advertising expenditure growth of 3.2% is forecast for 2017, according to the definitive AA/Warc Expenditure Report, which today published spend data for Q3 2016 – the first full quarter after the vote to leave the EU.

Adspend rose 4.2% year-on-year in Q3 2016 to £5,142m – the first third quarter to break the £5bn spend barrier. This was driven by strong growth in internet spend (15.3%), which in turn was boosted by 45.6% growth in mobile spend. Digital out of home spend (+24.7%) also performed strongly, and TV spend increased 1.4% from a record-high Q3 in 2015, when the UK hosted the Rugby World Cup.

The full year 2016 adspend estimate is 4.4% growth – a total of £21.1bn, and £886m more than in 2015. This is the seventh consecutive year of growth in the UK’s advertising market.

Stephen Woodford, Chief Executive at the Advertising Association said, “That adspend held up after the referendum is another marker of the strength of the UK’s advertising and media industries. As the Government gears up for Brexit negotiations and a new industrial strategy, it must prioritise protecting this global advantage.”

James McDonald, Senior Data Analyst at Warc commented, “Drawing from over three decades of unique and extensive industry data, we know that the amount spent to reach consumers has never been greater. Advertising on social platforms, particularly via mobile devices as native articles and videos, will continue to garner surging investment this year as marketers shadow media consumption habits. Yet the TV spot, an industry staple, will remain the largest ad format by spend in 2017.”

The Advertising Association/Warc Expenditure Report is the definitive measure of advertising activity in the UK. It is the only source that uses advertising expenditure gathered from across the entire media landscape, rather than relying solely on estimated or modelled data. With total market and individual media data available quarterly from 1982, it is the most reliable picture of the industry and is widely used by advertisers, agencies, media owners and analysts.

UK advertising expenditure, 2015–2017

 

Adspend 2015 (£m)

2015 vs 2014
% change

2016 (Estimate)

Forecast 2017

Adspend (£m)

y/y % change

y/y % change

TV

5,270

7.3%

5,353

1.6%

1.6%

  of which spot advertising

4,760

6.7%

4,790

0.6%

0.7%

  of which broadcaster VOD

175

20.7%

202

15.4%

12.4%

Radio

613

6.5%

637

3.9%

2.1%

  of which digital ad formats

20

27

31.4%

20.0%

Out of home

1,059

3.9%

1,111

5.0%

2.2%

National newsbrands

1,223

-10.8%

1,102

-9.8%

-7.9%

  of which digital

220

2.5%

224

2.1%

2.2%

Regional newsbrands

1,176

-6.2%

1,036

-11.9%

-8.6%

  of which digital

199

14.8%

196

-1.7%

3.8%

Magazine brands

941

-5.2%

885

-6.0%

-5.1%

  of which digital

282

5.8%

289

2.6%

3.6%

Cinema

240

21.9%

262

9.2%

2.4%

Internet

8,702

18.6%

9,957

14.4%

9.5%

  of which mobile

2,622

60.8%

3,826

45.9%

26.0%

Direct mail

1,912

1.4%

1,714

-10.4%

-7.8%

TOTAL UK ADSPEND

20,260

8.1%

21,145

4.4%

3.2%

Broadcaster VOD, digital revenues for newsbrands and magazine brands, radio station websites and mobile advertising spend are also included within the internet total of £8,702m, so care should be taken to avoid double counting. Radio includes branded content and digital. Revenue data from radio digital ad formats are provided as a separate data series from January 2017. The series is backdated to Q1 2015. From Q1 2015, the IAB has included spend for outstream/in-read video for the first time. This amounted to approximately £148m in 2015. Online recruitment data have been revised back to Q1 2015 in light of new IAB data. This increased the internet total by £270m in 2015. A methodological change to the way the Royal Mail calculates market data has resulted in an upward revision of direct mail totals back to Q2 2013. The direct mail total for 2015 is now £71m higher.

Source: AA/Warc Expenditure Report, January 2017.

 

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