The quarterly Advertising Association/WARC Expenditure Report is the definitive guide to advertising expenditure in the UK, with data for all key advertising media and sub formats dating back to when I was one year old (trust me, a long time ago), and forecasts looking ahead two years.
So, it is not a 'finger in the air' speculation when they announced today that ad spend was up 9.3% to £9.2bn in the first three months of 2024. This jump in spend set a new record high for a Q1 period!
In total, the Advertising Association and WARC have upped their predictions for the full year from a 7.7% rise, up from 5.8% at their last Expenditure Report.
The sector is also expected to further reap the rewards in 2025, with an expected rise of 5.5%to reach £41.66bn for the year (revised up from the previous forecast of 4.5% growth).
Runners and riders
Online advertising performed particularly well, with search going up by 12% and online display up by 12.8%. There was also a welcome return to growth for cinema advertising, which rose by 6.4%, and TV enjoyed modest growth, up by 1.2%.
The stand out categories behind the rise include consumables, including food and drink and cosmetics (boosted by the long awaited 'summer of sport'). Interestingly, these high-growth sectors are the ones under the most scrutiny by the CMA when it comes to their green claims - so time will tell how that may impact investment in advertising and/or the nature (excuse the pun) of that advertising.
Leisure and entertainment, media and transport also rose 8.9%. And, notably, transport is next on the CMA's hit-list when it comes to their investigations into potential 'greenwashing'. As we know, the CMA is set to gain new powers as early as 2025 to issue financial penalties of up to 10% of an advertiser's annual global turnover for breaches of consumer laws (including greenwashing and other misleading claims), and time will tell whether that might have a cooling effect on such claims and whether it may cut across Labour's growth, growth, growth strategy.
The road ahead
Looking ahead, broadcaster video on-demand (BVOD) is forecast to cross the £1bn threshold for the first time, rising by 13.1%. Out-of-home (OOH) is expected to see very significant growth of 12.5% this year, search is expected to grow by 10.1% and radio by 5.5%. Meanwhile,
However, the report indicates that all other major categories posted year-on-year declines for the period.
Disruption
AI adoption continues apace, and major online platforms are busily introducing "their own solutions" to improve the bottom line - though, controversially, I would suggest it may not lead to an improvement in the number of people employed in the industry!
The future's bright
The Advertising Association expects these good times to continue. Stephen Woodford, chief executive, Advertising Association said, "It is welcome news to see real-term growth and upgraded forecasts in the advertising market in Q1 this year, a positive sign that our industry is one of the driving factors in the UK's economic recovery... Advertising is a UK-wide industry, with three in five advertising jobs based outside of London and it is central to the successful development of the digital economy across the whole country."
https://www.lbbonline.com/news/uk-advertising-spend-reaches-92bn-in-q1-2024
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.