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UK adspend on display

29 Jul 2015  |  James McDonald 
UK adspend on display

The TV spot has been steadfast - but direct mail, OOH, radio and cinema are performing well.

Display adspend has grown at its strongest rate for four years. Here, Warc's James McDonald looks at the impact across different media.

Display advertising expenditure, which accounts for some 69% of total UK ad revenue, rose 8.5% year-on-year to £3.2bn in Q1 2015, according to the latest data from the Advertising Association/Warc Expenditure Report, released this week. Display adspend is forecast reach £13.2bn by year-end, while a further £13.8bn is expected to be spent in 2016.

At current prices, display adspend in the first quarter of this year grew at the strongest rate since Q4 2010 (a quarter in which growth was inflated by the 2009 crash) while expenditure topped the pre-recession peak for the first time. In real terms, accounting for inflation, first quarter adspend of £2.5bn was the highest since 2008.

Display ad expenditure in the first three months of this year was boosted by a particularly strong quarter for its largest component, TV spot, which saw ad revenues surge 11.5% year-on-year to reach £1.2bn.

Once again, this was the highest first quarter total on record. At 36%, TV spot has been steadfast, accounting for the same share of display spend as it did two decades ago. We do, however, forecast this share to rise closer to 40% by end-2016.

Further, we estimate that internet display adspend (including mobile, digital revenues for news and magazine brands, radio websites and broadcaster VOD) grew 18.8% to £608m over the first quarter, with internet providing approximately a fifth of all display adspend (up from a mere 3% ten years ago).

Direct mail is also a noteworthy contributor to display adspend with a share of around 15%, and data from the Royal Mail show ad expenditure grew 6.0% to £489m in Q1 2015, well ahead of forecast.

First quarter adspend growth was also recorded among other display components this year, including out-of-home (+9.7%), radio (+8.2%) and cinema (+19.6%).

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Conversely, display adspend among print titles mostly continued to fall. This includes an 8.2% decline for magazine brands and a harsher 10.4% fall for national newsbrands. Print display ad revenues for regional newsbrands were flat in Q1 2015, however. Despite this being the first quarter in 21 consecutive quarters that display spend hadn't declined for the regionals, the broader outlook for print remains challenging.

While display adspend has been increasing steadily since 1982 (save for the '91 recession, the dot com crash and the global financial crisis), its share of total UK adspend has been gradually falling from the 82% it once held in the 80s. We expect that share to be closer to 68% by the end of next year, even though spend should amount to some £13.8bn.

The primary reason for the fall in display's share of total ad expenditure, our data show, is a resurgence in classified adspend thanks to internet search. The online search market has grown from £19m in 2000 to £3.8bn last year, and we'll have more on why tomorrow.


James McDonald is a research analyst at Warc.

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Mediatel is publishing a series of articles over the course of the week from Warc's data team - providing deeper insights and analysis on the latest results. Sign-up to our free email bulletins to see them first.

To find out more about subscribing to the AA/Warc Expenditure Report please visit the website.

Mediatel subscribers can also now gain access to adspend and revenue figures by medium and aggregated forecast trends by medium from AA/WARC, Carat, eMarketer, GroupM and ZenithOptimedia in the Media Landscape tool.

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