Connected: Display Connected: Media Landscape Connected: Regional Connected: AV Consumer Surveys Connected: Direct LinkedIn LinkedIn logo icon Twitter Twitter logo icon Youtube Youtube logo icon Flickr Flickr logo icon Instagram Instagram logo icon Mail Mail icon Down arrow
Mike Fletcher 

Online spend drives upgraded forecast of 15.2% growth for UK ad market

Online spend drives upgraded forecast of 15.2% growth for UK ad market

Anticipated growth for the UK advertising market over the next 12 months has been upgraded to 15.2%, according to the latest AA / WARC Expenditure Report.

The second adjusted forecast in the last six months, now sees a 0.8 percentage point increase from October’s figures, which downgraded a 2021 return-to-growth from 16.6% predicted in July to 14.4%.

Today, a more positive 15.2% predication for ad market growth in 2021 also puts the UK way ahead of other international markets, with China expected to grow by 10.3%, Germany by 9.3%, the EU by 8.8% and the U.S by only 3.8% (pictured).

The revised growth is largely being fuelled by online, which looks to have helped UK ad-spend reach £23.17 billion by the end of 2020 - a marked improvement on the 14.5% fall to £21.5 billion forecast in October.

Actual figures for Q3 2020 now show that Internet spend rose 10.1% to £4.2 billion, buoyed by a 14.5% rise in paid search (which in turn was driven by e-commerce advertising).

James McDonald, head of data content at WARC said: “Paid search – which accounts for over a third of all advertising spend in the UK – was the format that gained most from a surging e-commerce sector. Ancillary research by WARC shows that online sales recorded a six-year leap in penetration in 2020, as e-commerce’s share of all UK retail value rose by 8.4 percentage points to 27.6%. This rate was ahead of China (24.9%) and double that of the U.S (13.4%) last year.

“The outlook for the year ahead is bullish, reflecting greater certainty around Brexit and the potential for the vaccination programme to unlock economic growth. We now believe that the ad market can overcorrect in these circumstances to top its 2019 peak, though large parts of the industry remain in a fragile state.”

Double-digit growth is expected by the Advertising Association across most media sectors in 2021.

Particularly strong results are anticipated for cinema at 228.4% and reflective of the fact the sector was closed for most of 2020; digital out of home at 53.6%, traditional out of home at 37.7%, and video on demand at 21.2%.

The Advertising Association’s CEO, Stephen Woodford said: “With the vaccine rollout accelerating and a Brexit trade deal in place, the 2021 business outlook is brightening, reflected by these new forecasts showing a stronger and quicker recovery in ad-spend, with a stronger rebound than in other large economies. With every £1 of advertising spend generating £6 of GDP, this is good news for jobs and growth in the wider economy.”

Leave a comment

Thank you for your comment - a copy has now been sent to the Mediatel Newsline team who will review it shortly. Please note that the editor may edit your comment before publication.