AA/WARC adspend report shows continued growth
UK adspend grew 4.6% to reach £22.2bn in 2017, the eighth consecutive year of growth, according to the latest Advertising Association/WARC Expenditure Report.
The final three months of 2017 saw expenditure grow 6.2% in Q4 2017 over the same period in 2016, with adspend pushing past the £6bn barrier for the first time in a single quarter.
The full year advertising growth forecast for 2018 has also been upgraded by 1.4 percentage points to 4.2% growth, and a further rise of 3.8% is expected for 2019.
If the forecast proves true, this will complete a decade of continuous expansion for the UK ad industry.
“These very impressive adspend figures demonstrate the strength and resilience of the UK advertising industry over the course of 2017,” said Stephen Woodford, chief executive at the Advertising Association.
“To see adspend hit the £6bn mark in Q4 is a very encouraging result, as is the prediction that we will see 10 years of continued growth through 2019.”
Woodford added that the results also reflect wider trends within the UK economy over recent months, with inflation at its lowest for a year, strong employment, and the recent upgrade by the IMF of its economic growth forecast for the UK.
Digital formats performed well during 2017, up 26.3% for digital radio, 19.3% for national digital newsbrands, and 7.1% for broadcaster video-on-demand.
Print suffered, however: national newsbrands saw a -5.6% decline in 2017 and magazines were down -11.5%. The forecasts for 2018 and 2019 show a continuation of that decline, albeit at a less severe rate (see table, below).
However, including digital revenues for newsbrands, magazine brands, TV and radio broadcasters, growth remains strong. Within this, spend on mobile formats (+37.3%) was particularly robust during 2017.
“The latest verified results illustrate a dynamic market, one which has now expanded for 18 consecutive quarters,” said James McDonald, data editor at WARC.
“Mobile continues to underpin growth – over 90% of additional mobile investment was directed towards search and social media in 2017 – yet there was vitality across the wider industry.
“Radio and cinema both recorded their fourth successive year of rising spend, while the out of home market expanded for the eighth year running. Further, we believe TV’s dip, caused mostly by reduced spending within the consumable goods category, is anomalous, and expect the channel to rebound this year thanks in part to the summer’s World Cup.
“Robust macroeconomic conditions and the continuation of 2017’s media trends reinforce our brighter outlook for market growth this year and next.”