AA: Adspend to grow 2.9% in 2011 to £15.95 billion

The UK advertising market brushed off fears about the health of the economy to register a 6.9% rise to £15.5 billion in 2010, according to the new Advertising Association/Warc Expenditure Report, released today.

The rise made 2010 the strongest year for adspend growth since the dotcom boom of 2000. It also represented a significant bounce-back from recession.

The performance was partly due a higher than expected adspend increase in the fourth quarter of 2010.

During the three month period, adspend increased by 5.8%. Television (+12%) and direct mail (+12.7%) were the strongest performing media.

Looking forward, growth is expected to dip to 2.9% in 2011, before rising back to 5.5% in 2012. The modest prediction for this year can be attributed to a relatively weak economy and falling consumer confidence.

Adspend growth will also suffer in year on year comparisons to its strong performance in 2010. However, the economy and advertising are expected to revive in 2012, with the latter boosted by
spend associated with the London Olympics.

The AA/Warc report confirms the trend of recent years according to which individual media channels have experienced markedly different fortunes.

Across 2010 as a whole, TV was the fastest-growing medium, with an overall increase of 15.8% – its strongest growth rate since 1986. This represents a major improvement on the previous year, which saw television adspend fall by 10.1%.

Spend on TV is predicted to continue to grow in early 2011, as advertisers seek to tap into a short-lived public mood created by extended public holidays and the Royal Wedding. Growth in television advertising is however expected to slow down in the second half of the year.

Out-of-home advertising also performed well in 2010, rising 12.5%, and internet is expected to have maintained its steady growth with a 10.9% increase for the year.

But results for press were mixed – national newspapers increased spend by 6% in 2010, but regional papers and magazines fared less well, dropping 6.4% and 5.9% respectively.

Tim Lefroy, chief executive of the Advertising Association, said: “These are good news figures, not just for the advertising sector itself, but for UK business more widely. Rising ad spend reflects investment in sales by business, growth in media and content and, ultimately, signals a competitive, healthy UK economy.”