GroupM: 2017 will end better than expected
2017 will end better than expected with investment in advertising totalling £18.9 billion, according to the latest report from GroupM.
The investment arm of WPP originally forecast growth of 4.1%, but on Wednesday (22 November) that figure was raised to 5%.
It means UK advertising is set to see a ninth successive year of growth and will remain one of the fastest-growing media markets in 2018 with a 4.8% increase predicted to take total investment to £19.8 billion.
“Advertising investment remains stable despite a fragile economy”, said Adam Smith, GroupM’s futures director.
“The focus of marketers remains relentlessly short-term and arguably underweighted relative to long-term brand building in broadcast media. This favours performance-oriented digital media which continue to be the most robust growth story despite concerns over measurement, transparency, brand safety and other issues”.
GroupM also forecasts that digital, ‘pure play’ internet will hold 60% share of UK ad investment in 2018, driven by rising digital audiences, growing e-commerce and marketer 'short-termism', where performance-focused digital media is harnessed to drive near-term return-on-investment.
GroupM believes pure play digital advertising will grow by 13.3% in 2017 and 9.8% in 2018.
Elsewhere, legacy media - including its digital components - will shrink 4.4% in 2017 and a further 2% in 2018.
What will be TV’s first decline in five years will amount to 2.9% in 2017, but it is "likely to stabilise in 2018 in a context of slower audience loss and attractive pricing."
GroupM also trimmed its original 2% forecast for out-of-home advertising growth to zero in 2017. For 2018, the view is slightly more positive at +2% - "if promised improvements in effectiveness, automation and efficiency bear out".
However, the prediction for national newsbrands is grim: they are estimated to decline by 12% in 2017 and 8% in 2018.
"Some hope for mitigating these revenue declines are pinned to PAMCo’s Audience Measurement for Publishers which goes live in February," the report states. "It will include a new comScore element allowing planners to build schedules including Facebook Instant Articles and Google’s Amp."
Commenting on the latest forecasts, Nick Theakstone, CEO, GroupM UK said the market was stable despite an overall low-growth consumer spending environment.
"This is encouraging," he said, "but we are concerned about pressures on marketers to overweight short-term ROI versus brand building for the long-term. It’s imperative they get the balance right.
“It’s also crucial that the industry deliver better audience measurement to support media planning for performance and brand building alike.
"As ever, we lend our full support to industry initiatives like BARB’s Dovetail and PAMCo’s AMP while also filling the gaps we see, like scaling an accountable addressable TV market with our new business, Finecast."