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Michaela Jefferson 

AA/WARC records strong digital growth across the board

AA/WARC records strong digital growth across the board

The UK has marked its 21st consecutive quarter of market growth with the third quarter of 2018, driven in the main by increasing spend on online advertising.

UK adspend grew 5.1% during the quarter, amounting to £5.6bn in total.

The Advertising Association/WARC Expenditure Report therefore now predicts a 6% growth in adspend for 2018, reaching £23.5bn for the year - a small -0.3% revision on its previous forecast.

Q3 saw positive growth across the board for digital - particularly mobile, which grew 23.6% year-on-year (YoY). Notably high growth was also recorded for digital radio ad formats (up 25.1%) and VOD TV services (up 11.5%).

Meanwhile, national newsbrands and magazine brands saw modest growth in adspend across their digital platforms - up 3.7% and 1.5%, respectively - whilst regional newsbrands saw digital adspend grow 10.9%.

Overall, investment in online advertising is expected to have grown 13.4% across 2018, followed by a further 9.8% rise over this year.

However, it is expected that this year will see UK advertising growth slow, reflecting concerns over the potential disruption that could be caused by Brexit.

“As the clock ticks down to our departure from the EU, it is crucial the Government provides the certainty we are all seeking in business," said Stephen Woodford, chief executive at the Advertising Association.

"We are predicting continued adspend growth of 4.6% in 2019 and an agreement with the EU that keeps disruption at a minimum and keeps trade and talent flowing will greatly help this growth. UK advertising is the best in the world and we need a deal that ensures we keep it that way.”

Faring less well in Q3, direct mail saw adspend down -14.0% and cinema fell -8.3%.

Meanwhile, digital growth failed to save newsbrands and magazines from falling investment overall, with national newsbrands down -7.1%, regional newsbrands down -5.3%, and magazine brands down -2.8%.

Elsewhere out-of-home continued to grow, up 7.3% year-on-year.

Commenting on the report, James McDonald, data editor at WARC, said: “Our projection of 4.6% growth in the UK’s ad market this year is firmly based on a business-favourable outcome from the EU withdrawal agreement, and would mark a decade of continuous expansion since the last advertising recession.

“Further, a preliminary estimate of 6% growth in advertising investment last year represents a faster rate of expansion than was recorded in 2017, and is therefore indicative of an industry in rude heath. This is particularly true in relation to digital ad formats, all of which are currently forecast to attract higher levels of investment in 2019.”

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