AA/Warc adspend forecast: Industry analysis
Advertising spend in the third quarter of 2017 rose 3.5% year-on-year to reach £5.4bn, according to the latest figures from the Advertising Association and WARC. The rise, which was £551m higher than in 2016, marks the 17th consecutive quarter of market growth.
Here, industry experts react to the findings.
2017 was a year of uncertainty and rapid change, however, despite the cautious tones which were raised in the industry – it’s fantastic to see that UK advertising spend reached a record high at the end of last year.
With the projection for total market growth in 2018 being 2.8%, we’re excited for the year ahead for our clients. This growth shows consumers remain confident in brand’s marketing, even during economic ambiguity.
It’s been the “year of mobile” for years, however, as mobile ad spend rose 30.7% year-on-year – could this become reality for 2018?
Mobile’s strong performance was sustained by the 44.7% rise in social media advertising, which is not surprising as a 2017 study estimated that we tap, swipe and click on our devices 2,617 times a day.
A year of politico-economic nervousness and soaring stock markets was always going to be a tricky one to predict advertising expenditure.
Any media fool (and there are plenty) could have predicted the continued fast growth of mobile, perhaps less easy to predict is the longer term effect of the brand safety / tracking back lash aimed at the dynamic duo of Google and Facebook.
I personally think any effect will be negligible and outweighed by more positive factors of marketing success. But the report does continues to highlight the fact that digital ad expenditure will benefit broadcaster and publisher brands, as well as the digital pure play.
While conditions were challenging in the third quarter, these latest UK ad spend figures point to the continued robust performance and overall growth of the Out-of-Home sector in 2017. This reaffirms the confidence UK advertisers place in the medium as a trusted and reliable channel for reaching consumers and creating impact at scale.
As in previous quarters, innovation and investment in digital Out-of-Home (DOOH) remains the key driver of spend and growth in the sector. Alongside new and improved digital formats, OOH is also drawing on cutting-edge technologies to open up opportunities to reach outdoor audiences in creative new ways, from experiential installations using Virtual Reality to Lightvert’s pioneering ECHO technology, which saw its commercial debut in the final quarter of the year.
Looking across the media spectrum, activation-led investment on mobile and online remains strong, and advertisers are taking advantage of OOH’s complementary strengths as an established brand-builder and broadcast medium, akin to TV, to intelligently connect with consumers on the move.
The results show a continued faith from British business that marketing investment can grow their revenues. Increased spending in mobile is expected, but must also recognise that social media pricing has increased by up to 35% year on year and may be driving that.
Diversification of media spend into other supporting channels suggests CMOs are looking harder at the mix of spend required, which is welcome news for any media owner that delivers a valuable audience in a brand safe context.