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Digital advertising continues to drive growth in adspend

Digital advertising continues to drive growth in adspend

Despite the “uncertain period for business” leading up to the original March 29 Brexit date, the first quarter of 2019 saw UK advertising expenditure climb 4.2% year-on-year (YoY) to a total of £6bn.

According to the latest Advertising Association/Warc Expenditure Report, digital advertising continues to act as a driving force. Q1 recorded notable YoY rises in spend on online radio (+26.5%), TV VOD (+17.5%), total online display (+16.6%) and digital out-of-home (+10.9%).

Meanwhile, online classified grew 0.4%, while spend on search grew 10.6%.

Stephen Woodford, chief executive at the Advertising Association, called the figures “a testament to the resilience” of the UK ad industry.

“We see online advertising in all its forms continuing to perform strongly, demonstrating again how the UK is Europe’s leading online advertising marketplace,” he added.

“We hope that the new administration can deliver a business-friendly outcome to our relationship with the EU, ensuring the UK’s domestic advertising market remains robust and our advertising exports, which are world-class, keep growing.”

However, while digital has continued to see overall expenditure growth, traditional media fared worse than expected compared to the first quarter of last year. National newsbrands saw ad investment fall -9.1% YoY overall alongside a -10% decline online, with online performing -15.2pp lower than previously forecast.

Meanwhile, magazine brands were down -10.8% overall (-5.0pp versus forecast), and both TV and radio saw investment fall overall despite strong online growth, down -2.5% and -1.7%, respectively.

Only cinema (+12.3%) and OOH (+6.8%) managed to buck the trend.

Nevertheless, the report forecasts growth for 2019 across the majority of formats, with 2019 to see an overall increase in ad expenditure of 4.6% to £24.6bn. The UK ad market is then expected to grow a further 5.3% in 2020.

Online radio and TV VOD are expected to see ad investment grow the most, with radio to see a 22% rise in spend on its online platforms in 2019, while TV VOD is set to grow 18.1%.

Elsewhere, the report forecasts growth for cinema of 7.1% and 10.3% for digital OOH, while national newsbrands are to return to growth online by year-end.

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