AA/Warc: Advertising spending steady despite economic uncertainty
UK advertising expenditure remains steady despite turbulence in the global economy.
Figures from the Advertising Association and Warc showed an increase of 1.1% in ad spend during the first quarter of 2012.
Expenditure is expected to improve over the year, reaching an overall growth rate of 2.5% in 2012, with forecasts of a further rise of 4.4% in 2013.
UK advertising expenditure is predicted to reach a value of £16.8 billion in 2012 and £17.4 billion in 2013.
The AA/Warc expenditure report provides the most comprehensive measure of UK ad activity.
It includes an overview of ad spend by individual media; encompassing print, TV, internet, radio, cinema and out of home.
Internet and radio
Internet spending is estimated to have grown by 11.1% in Q1 this year compared with Q1 in 2011.
It is expected to remain strong throughout the year, with a forecast of 10.1% growth and an overall value of £5.3 billion in 2012.
Out of home saw a healthy 3.1% increase in Q1, in a year when the Olympic and Paralympic Games are expected to drive overall growth by 4.1% to £0.9 billion.
Radio also performed strongly, growing by 6.9% in Q1 with forecasts of 3.8% (£0.4 billion) growth in the year overall.
Government spend is set to increase faster than any other category in 2012. This has traditionally been a strong source of radio revenues.
Cinema, press and TV
Cinema expenditure increased by 9.5% in Q1 with a positive forecast of 3.1% for the year (£0.2 billion) as a whole.
TV ad spend fell by 0.7% in Q1 but is expected to remain broadly steady with 0.3% growth (£4.2 billion) predicted for the year.
Expenditure was weakest in press, with a decline of 10% in Q1 2012. Overall press has been forecast to fall by 5.1% in 2012 (£3.7 billion), though spend is predicted to stabilise in 2013.
Results analysis
Tim Lefroy, chief executive of the Advertising Association said: “In the face of global economic uncertainty, UK advertising holds a steady course.
“Evidence shows that advertising invigorates GDP growth, so a healthy ad market is good news for the whole economy, not just advertisers.”
Data editor at Warc, Suzy Young added: “It remains a very short term market.
“There is some evidence that TV advertisers, for example, have brought budgets forward to Q2 from Q3 to get the benefit of marketing spend now as prospects for the rest of the year remain unclear.”