AA/Warc adspend report: Industry reaction

25 Apr 2017 
AA/Warc adspend report: Industry reaction

UK adspend grew 3.7% to reach £21.4bn in 2016, the seventh consecutive year of market growth, according to the latest Advertising Association/Warc Expenditure Report. Here, experts from around the media industry dissect the findings.

Joseph Worswick, Joint Managing Director, Media iQ

“It is a positive sign to see digital continuing to grow. Having had a troubled start to the year with ad fraud and brand safety making national headlines, it’s great to see that this hasn’t had an overly negative impact on budget.

“By utilising the data available to them, advertisers can create digital ad campaigns which will have a much more meaningful impact on consumers. We are now seeing marketers investing in tools which enable a better understanding of customers, to then be able to target them with the right content at the right time. By using data at the heart of all consumer engagement, businesses are beginning to digitally transform. This ongoing innovation of digital spend across the industry is continuing to drive growth.

“In addition, with increasing use of mobile devices amongst consumers, macro data is a brilliant way to truly make the most of this platform. The increasing figures within the area are a clear sign that this digital device will remain a key area for advertising campaigns.

"As AA WARC demonstrates, digital advertising will continue to be a prominent area for emerging technologies that will aim to deliver campaigns in new, creative ways while making the most of programmatic."

Rachel Forde, CEO, Mediavest, Spark

“It’s impressive to see UK advertising expenditure continue to grow at such a scale and encouraging to see further growth predicted. Investment in the sector at this level increases the need for agencies to keep innovating and deepen their commitment to proving campaign effectiveness.

“It’s not surprising that digital contributes so highly to total adspend, with it being a major focus for some time now. Often digital can be thought about as something that just lives on the internet, however it’s an approach that should be integrated through every part of a campaign strategy. The AA/WARC results prove that we are making a step in the right direction.

“I expect to see more movement within the digital sector, and advertising as a whole, as businesses work to make the most of every platform to deliver successful campaigns.”

Tal Smoller, European Media Analyst, Bloomberg Intelligence

“The AA/WARC's prediction of a 1.4% decline in spot TV advertising in the U.K. in 2017, as per their latest Expenditure Report, confirms the challenging market TV broadcasters are expected to be up against this year, amid continued uncertainty. While it expects digital to be the main driver of ad spending growth, the silver lining for broadcasters could be AA/WARC's forecast of a 13.7% gain in their online video-on-demand ad sales.

"Though in the case of ITV for instance, only about 11% of the revenue ITV generated from broadcast and online last year was attributed to its online, pay and interactive sales collectively. The projection of an accelerated rate of growth in broadcaster VOD ad sales this year, could perhaps partly be a consequence of brands backlash against Google.

“AA/WARC also reported that TV has defended a steady 25% share of total ad spending over the last decade, likely indicating that digital’s gains continue to come at the expense of print advertising.

"It does however highlight that broadcasters' ability to deliver multi-platform ads could become key in retaining and expanding their share of advertiser budgets in future.”

Matt Teeman, managing director, Primesight

“Whilst issues around transparency and trust in advertising have made headlines recently, it’s good to see this hasn’t put a hold on advertising spend for the mean time. With ad spend on the rise and an anticipated growth of 2.5% this year and a further 3.3% in 2018, it’s definitely a positive sign in what’s been a uneasy start to the year.

“It’s not surprising to see formats such as internet steaming ahead with growth of 13.4% and this continues to present a brilliant opportunity for other platforms like Out of Home, for example, to build its credentials and truly take advantage of this growing form of advertising.

"For the industry to continue to move in this direction, each sector will need to ensure it continues to deliver on new, relevant and creative ways to build brand awareness and ROI.”

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