UK Adspend Shows Solid Growth In Second Quarter
Advertisers continued to return to television, national newspapers and outdoor in the second quarter of this year as the economic recovery gathered steam.
The latest figures from the Advertising Association show that total UK adspend rose by a solid 5.7% year on year to just under £3.7 billion, as confidence slowly returned to the industry and corporate marketing departments continued to dig deep.
Television expenditure rose by 7.3% to more than £1 billion in the three months to June and national newspapers were up by 8.1% during the same period to £499 million. Growth was driven by increased spend on brand promotion and better than expected profits.
However, outdoor advertising was the fastest growing medium with expenditure rising by an impressive 14.2% year on year to £211 million. Online retail, property and household brands continue to invest heavily in the sector and accountability has improved significantly (see Outdoor Adspend Climbs By 14% In Second Quarter).
Expenditure on consumer magazines rose by 5.6% year on year to £212 million and business titles saw adspend increase by 2.1% during the same period to £271 million. Recovery in the business to business sector remains slow, but the medium managed its first quarterly rise since the start of 2001.
Commercial radio also performed well in the second quarter with increased investment from major FMCG brand-owners helping expenditure to rise by 6% year on year to £133 million. The RAB predicts that the industry can achieve a 10% share of display advertising revenue by the end of the decade as it exploits its power as a brand conversation medium (see RAB Sets Sights On 10% Share Of Display Revenue By 2010).
Direct mail was the only sector to see adspend dip in the three months to June, indicating that its appeal as a cost-effective marketing tool could be waning in light of the ongoing advertising recovery. Expenditure fell by 1.1% year on year to £539 million.
The latest figures, which have been compiled by the World Advertising Research Centre, confirm the findings of the June Bellwether report from the Institute of Practitioners in Advertising, which shows that marketing budgets for the second quarter were revised upwards (see Market Recovery Continuing For UK Advertisers).
| Advertising Expenditure By Medium Q2 2994 And Annual Change | |||
| Q2 2004 Adspend | Year on Year % change | ||
| £m | current prices | constant prices | |
| National newspapers | 499 | 8.1 | 6.5 |
| Regional newspapers | 803 | 6.3 | 4.8 |
| Consumer magazines | 212 | 5.6 | 4.1 |
| Business magazines | 271 | 2.1 | 0.7 |
| Total Press | 1,784 | 6 | 4.5 |
| – of which display | 931 | 5.9 | 4.5 |
| – of which classified | 853 | 6.1 | 4.6 |
| Television | 1028 | 7.3 | 5.8 |
| Radio | 133 | 6 | 4.5 |
| Outdoor | 211 | 14.2 | 12.6 |
| Direct mail | 539 | -1.1 | -2.5 |
| Total measured adspend | 3,696 | 5.7 | 4.2 |
| Source: AA/WARC | |||
The Advertising Association recently revised up its annual adspend forecasts for 2004 from 3.2% to 4.8%. Media buyer Carat also now expects expenditure to reach 4.6% this year, spurred by the growth in online advertising which is continuing to outstrip all other media (see Carat Revises Adspend Forecasts Upwards).
Advertising Association: 020 7828 2771 www.adassoc.org.uk
Recent Related Stories from NewsLine New Business Activity Remains Subdued In First Half Improved Advertising Revenue Drives ITV Profits Up 59% Carat Revises Adspend Forecasts Upwards
Subscribers can access ten years of media news and analysis in the Archive