Advertising expenditure in the UK could grow by as much as 37.9% in real terms by 2019, according to the Long Term Advertising Expenditure Forecast compiled by the World Advertising Research Center (WARC) on behalf of the Advertising Association (AA).
The report looks at two possible scenarios for UK adspend, a ‘high option’ and a ‘low option’; the low option forecasts an adspend increase of 16.8% over the same period. In terms of compound annual growth rate (CAGR), this translates as 2.5% on the high option, but a mere 1.2% on the low.
The internet is the dominant force behind adspend growth over the period. In terms of display advertising, it is expected to increase its 3.9% share of the market achieved in 2006 to 12% in 2019.
A recent forecast from eMarketer predicted that UK online ad spending will pass £3 billion in 2008, and show healthy growth despite financial and political uncertainties in Britain (see UK Online Adspend To Pass £3bn In 2008).
In the classified sector, Long Term Advertising Expenditure Forecast predicts that the share of advertising taken by the internet will rise sharply over the forecast period. On the high option, the internet is forecast to grow by a CAGR of 11.6%, whilst even on the low option the CAGR is expected to be in the region of 10%.
Over the forecast period, display advertising and classified recruitment are both expected to lose share of total adspend. Display advertising is forecast to take 60% of all advertising in 2019, down from 68% in 2006.
Classified recruitment, meanwhile, is expected to lose share (down from 8% in 2006 to 5% in 2019) and revenue in real terms. Other classified will benefit, with its share of total spend rising to 34% in 2019 from 24% in 2006, primarily boosted by the growth of paid-for search advertising.
| High and Low Twelve-Year Forecast Options, (£m at constant 2000 prices) |
| |
High Option |
Low Option |
| Year |
Total |
Display |
Classified recruitment |
Other classified |
Total |
Display |
Classified recruitment |
Other classified |
| 2007 |
15,981 |
10,587 |
1,217 |
4,177 |
15,981 |
10,587 |
1,217 |
4,177 |
| 2019 |
21,966 |
13,289 |
1,201 |
7,475 |
18,600 |
11,253 |
1,017 |
6,330 |
| Note: Media covered by the report include television, national newspapers, regional newspapers, consumer magazines, business magazines, directories, radio, outdoor & transport, cinema, the internet and direct mail. |
| Figures for 2007 are provisional. |
| Source: Advertising Association’s Long Term Advertising Expenditure Forecast. |
Meanwhile, a forecast from GroupM predicted that advertising spending in US measured media will show an almost 4% year on year increase in 2008.
Worldwide spending is expected to rise 7% to $479 billion in 2008 following an anticipated 6% increase in 2007 (see Worldwide Adspend Expected To Rise 7% to $479 billion In 2008).
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