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Ellen Hammett 

AA/Warc: Sport and recruitment boost Q2 adspend

AA/Warc: Sport and recruitment boost Q2 adspend

Strong performances for TV and radio in the first quarter of 2014 and the improving economic outlook have led the Advertising Association and Warc to revise their forecasts upwards for the UK's ad market, with the latest expenditure report forecasting 6% growth rate in 2014 and 6.7% in 2015.

Total UK advertising expenditure increased by 5% in Q1 2014 for each £4,441 million, ahead of the 4.5% growth predicted in April.

Spot TV advertising saw a revenue increase of 6% in Q1 to reach £1,100 million, which the report says should accelerate to 10.5% growth in Q2 as TV sees a significant boost from the World Cup.

The rate of increase is expected to ease in the third quarter, reflecting the impact of budgets brought forward specifically for the tournament.

Overall TV advertising is expected to deliver a 6.5% increase this year compared with 2013.


Radio also posted a positive start to the year, rising by 5.7% year on year in Q1. Q2 is expected to see growth of 7.6% before slowing for the rest of the year. AA/Warc forecasts radio to record an annual increase of 4.4% in 2014, the sector's best performance since 2003.

The results ensured that total display saw a strong start to 2014, increasing by 3.1%. Across the year an increase of 4.7% is forecast, followed by a further increase of 5.8%.

After recording 21 quarters of decline out of the last 25, spend on recruitment is finally showing signs of recovery. Adspend grew in both the final quarter of 2013 (3.7%) and the first quarter of 2014 (2.6%), with growth expected to continue through to 2015. Total recruitment spend is predicted to reach £521 million this year.

"The latest set of data shows the importance of global events such as the World Cup to advertising spend in the UK," said Karen Fraser, director of strategy at the Advertising Association.

"Following a positive start to the year in Q1, Q2 is set to be a strong quarter for the sector, buoyed by the tournament."

At-a-glance media summary

- TV spot advertising grew 6.0% in Q1 2014 and is expected to benefit from increased adspend around the World Cup in Q2 (+10.5%). Overall TV should record 6.5% growth compared to 2013.

- Radio (excluding branded content) rose by 5.7% in Q1 2014 vs Q1 2013. AA/Warc expects radio to register annual growth of 4.4% in 2014, the sector's best performance since 2003.

- Out of home - While 2014 has started with a year-year-on-year drop of 2.2% to £990m, AA/Warc forecasts overall growth of 2.7% for the year, a downgrade of 1.8pp from the April report.

- National newsbrands print ad revenues declined more than anticipated in Q1 2014, down 8.3% compared with 2013 to £286m. While digital adspend rose 19.0% for the same period to £47m, it was not sufficient to offset the print drop, with the sector as a whole recording a 5.2% dip. Forecasts have been downgraded for 2014 to -1.9%.

- Regional newsbrands continued to decline in Q1 2014, with adspend down 6.8% compared with the same period last year. This represents a 9.7% drop for print (to £263m) and an 18.6% increase for digital revenues (to £39m). AA/Warc anticipates an overall decline of 7.3% in 2014 - in line with 2013.

- Magazine brands saw adspend dip 3.8% in Q1 2014, following a 6.5% decline for print (to £172m) and a 6.3% uptick for digital (to £53m). Total adspend is predicted to record a 2.1% decline in 2014.

- Cinema adspend registered slight year-on-year growth of 0.4% in Q1 2014, reaching a value of £36.3m. Growth is expected to accelerate throughout 2014, notably in Q3 (+10.6%) when buoyed by summer blockbusters. AA/Warc anticipates overall growth of 6.4% this year.

- Internet adspend grew 15.6% in 2013 to £6.3bn. With a growth rate of 95.2% in 2013, mobile is expected to continue to grow rapidly - by 75% in 2014 and 47% in 2015. Total internet adspend (including mobile) is expected to increase by 14% in 2014.

- Direct mail adspend dropped by 1.4% in Q1 2014. AA/Warc expects marginal growth for the remaining quarters and an overall rise of 0.6% for the year as a whole. New data from the Royal Mail shows addressed mail's advertising revenue reached £1,882m in 2013, a year on year dip of 1.2% compared with 2012.

Exclusively this week, Newsline is running in-depth articles from Warc examining the latest findings in more detail. Check in to or follow us on Twitter to find out more.

MediaTel subscribers can access aggregated forecast trends by medium from AA/Warc, Carat, eMarketer, GroupM and ZenithOptimedia in the new Media Landscape tool.

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