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AA/WARC records strongest Q2 adspend since 2014

08 Nov 2018  |  Scarlett O'Donoghue 
AA/WARC records strongest Q2 adspend since 2014

UK advertising spend has had its strongest second quarter since 2014, with adspend during Q2 2018 up 6.4% year-on-year (YoY) to £5.6bn.

The first half of 2018 therefore saw an overall rise of 7.2% YoY to a total of £11.4bn.

As a result, the Advertising Association/WARC Expenditure Report, published today, has updated its forecasts for 2018. The report now predicts a 6.3% growth in adspend this year (up 1.5 percentage points from its previous forecast), followed by a 4.9% growth in 2019. This would lead to a projected adspend total of over £23.5bn for 2018.

Growth in internet advertising (inclusive of online revenues for newsbrands, magazine brands, broadcaster video-on-demand and radio station websites) continues to accelerate, driving overall market growth. As a result, full-year projection figures have been upgraded by three and a half points to 13.3% growth this year.

For the first time, the second quarter saw mobile account for over half of search spend; meanwhile, online video attracted half a billion pounds through Q2.

Elsewhere, the TV market grew ahead of expectations, with total spend rising 1.9% to £1.2bn, and radio saw a 20.4% YoY increase in digital adspend versus Q2 last year.

Despite strong growth figures, Stephen Woodford, chief executive at the Advertising Association, warned that the upgraded predictions for 2018 and 2019 depend on getting the right deal from Brexit negotiations.

"Spend on advertising is showing real strength and resilience especially at a time of some uncertainty for UK business," he said.

"We know advertising has a positive effect on the economy, with £1 spent generating £6 for UK GDP, so it is encouraging to see the strongest Q2 and H1 results since 2014."

"[However], we must also ensure that the unique features that have made the UK the global hub for our industry, such as access to the best and brightest creative talent from across the world, are prioritised as we leave the EU."

At the other end of the spectrum, national newsbrands saw a sizeable drop in adspend - recording a -7.4% YoY change for Q2 despite a 3.6% increase in digital spend. According to the forecasts, adspend in national newsbrands is expected to fall -4.3% by the end of 2018.

Magazine brands and cinema both also saw adspend fall in Q2, down -9.0% and -2.4%, respectively - though magazines saw a healthy 6.2% rise in spend on their digital platforms.

James McDonald, data editor at WARC added: “Growth in online advertising spend continues to exceed our expectations, resulting in the fifth upgrade to our forecasts in as many quarters.

"Barring any major shock to the system, this trend should continue to play out over the years ahead, lifting total market value in tow.”

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01 Jul 2020 

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