UK adspend could grow 52% in period to 2020

The report, compiled by the World Advertising Research Center (WARC) on behalf of the Advertising Association (AA), looks at two possible scenarios for UK adspend, a ‘High Option’ and a ‘Low Option’; the Low Option forecasts an adspend increase of 28% over the same period. In terms of compound annual growth rate (CAGR) this translates to 4.3% on the High Option and 2.5% on the low. If the current downturn period is included, then adspend is forecast to grow by 32% between 2007 and 2020 on the High Option, and by 11% on the low one.

High and Low Twelve-Year Forecast Options, (£m at constant 2000 prices)
	High Option				Low Option
	Total	Display	Classified Recruitment	Other Classified inc. Search	Total	Display	Classified Recruitment	Other Classified inc. Search
%	13,976	9,113	953	3,910	13,976	9,113	953	3,910
	21,207	11,743	1,304	8,160	17,840	9,879	1,097	6,865
	4.3	2.6	3.2	7.6	2.5	0.8	1.4	5.8
Note: Media covered by the report includes television, national newspapers, regional newspapers, consumer magazines, business magazines, directories, radio, out-of-home, cinema, the internet, direct mail and mobile
Source: AA’s Long Term Advertising Expenditure Forecast

Over the forecast period, the share of total adspend accounted for by “other classified” (which includes paid-for internet search advertising) is expected to increase from its current level of around 27% to 38% by 2020. Over the same time, display advertising’s share will ease from 66% to 55%, with the balance being classified recruitment advertising.

The internet continues to be the major force behind adspend growth over the period, said the AA. In the display advertising sector, its share of spend is forecast to rise from an estimated 6% in 2008 to just over 7% by 2010 and 14% by 2020.

In the classified sector, however, it is expected to become the dominant medium. Here, its share of recruitment advertising is expected to rise from 25% in 2008 to 31% in 2010 and 58% by 2020. Among other forms of classified, the internet’s 50% share in 2008 is forecast to rise to over 80% by 2020. Mobile advertising is expected to account for around 10% of all advertising at this time.

At the end of last year, eMarketer cut its forecast for UK online ad spend, predicting that it would grow 7.2% in 2009, down from its May forecast of 17.2% (see UK online ad spend forecast to grow 7.2% in 2009).

The Long Term Advertising Expenditure Forecast bases its advertising expenditure forecasts around the expected future performance of the UK economy, which is itself largely dependent on the state of the global economy.

The forecast assumes that, after declining in 2009, UK GDP will recover in 2010 and then improve further, before recording annual growth rates of around 2.4% from 2013 onwards. This compares with an average of 2.6% over the period 2000 to 2007.

A forecast from GroupM published in December predicted that total UK advertising spend would fall by nearly 6% year on year in 2009, the worst of any developed country (see UK ad spend to fall nearly 6% in 2009).