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Newsline Staff 

GroupM: UK advertising looks strong, but growth to slow

GroupM: UK advertising looks strong, but growth to slow

UK advertising is forecast to increase to £21.8bn in 2019, up from £20.5bn in 2018, according WPP's investment wing, GroupM.

However, the rate of growth has slowed and is predicted to reach 6.1% for 2019, down from 7.8% in 2018.

"Planning for Brexit contingencies is occupying management bandwidth, which is affecting ad-budget setting, and could potentially lead to reductions," GroupM said in its 'This Year, Next Year' report on Monday.

The deceleration is expected to continue into 2020 toward a 4–5% range as advertising "gradually reverts to more normalised growth" levels, GroupM reports.

Digital advertising, and search in particular, remains a driver of growth and now accounts for more than 60% of total UK advertising and is growing at a double-digit pace - around +11% forecast for 2019.

Meanwhile, digital media “pure plays” represent the largest single group of ad sellers, and Google and Facebook represent around three-quarters of this figure on a gross basis.

GroupM said television has "sustained its scale" and remains a "relatively stable medium" in terms of advertising revenues.

After hitting a plateau of around £4.5bn, spending was effectively unchanged in 2018 over 2017 and "looks set to remain at that level for 2019 and 2020, still accounting for around 20% of media investment."

Elsewhere, in out-of-home, digital formats are "increasingly important", accounting for half of spending in OOH during 2018.

Further share gains are still to come as more automation takes root, GroupM said, including the emergence of performance-based targeting and data-driven trading. For now, however, OOH growth is forecast to exceeding 3% in both 2019 and 2020.

Radio also appears set to hold on to its revenue base this year, followed by closer to +2% growth next year.

However, newspapers and magazines (but not their digital counterparts) now account for less than 10% of media investment on a combined basis in 2019 and beyond, down from more than 50% as recently as 2004.

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