UK advertising is set to witness a 6.3% increase in spending this year, totalling £17.3 billion of investment, according to the latest figures from GroupM.
The forecast, published this week, is a small downward revision from the forecast of +7.2% made in November 2015, owing to a “mild deterioration” in consumer indicators, including wage growth, job creation and consumer spending, as well as the disruption felt by the EU referendum.
In a statement, GroupM said it believes that a vote to remain in the EU would end uncertainty and be likely to yield a moderate ad investment acceleration in the second half of this year.
In the short term, budget cuts and deferrals most noticeable in TV (including broadcaster VOD) have impacted the previous forecast of +7.4% falling to +2.6%.
The forecast also highlights declines in print media where “structural weakness” persists and digital substitutes “struggle to retrieve departing readers and advertisers”.
Digital advertising growth remains the principal contributor to investment growth for the third successive year with growth double the market average.
“We came into the year predicting +7% for TV and now we are at 2%-3%, in part thanks to a harder comparison created by TV outperforming in 2015,” said Adam Smith, futures director, GroupM.
“We’d agree with ITV’s remark that softness set in around 20 February, when the EU referendum was announced. Although TV subsequently lost momentum, and it is relatively easy to defer TV investment, we still think a degree of post-EU referendum recovery is a likely scenario.”
UK media investment is already 13% larger in real terms since the historic peak in 2008 and 31% larger since the historic trough of 2009.
