UK advertising expenditure up 2.3% last year to £17.2 billion

Advertising expenditure in the UK reached £17,172 billion in 2012, up 2.3% on 2011 according to figures released today in the Advertising Association and Warc Expenditure Report. The last time advertising spend exceeded £17 billion was prior to the recession in 2007 (£17,364 billion).

AA/Warc’s forecasts for the next eight quarters show adspend continuing to grow, reaching a 5% growth rate in 2014, well ahead of inflation. Growth of 2.7% is expected in 2013.

Report highlights include:

• Out of home advertising enjoyed a strong performance in 2012 as a direct result of an Olympic boost in Q3, but AA/Warc forecasts a decrease in 2013
• National newsbrands saw a decline of -6% in 2012, with zero growth predicted for 2013 but +2.7% growth in 2014, driven partly by a strengthening economy plus a strong increase in digital adspend at +20.3%
• It is the same scenario for magazine brands in 2014, where digital revenues will power overall growth of +1.1%.

New to the latest release is what the authors describe as a “major change in methodology” that allows subscribers to view the impact of online adspend for newsbrands, magazine brands and TV (see table).

Newspapers also become ‘newsbrands’, and magazines ‘magazine brands’ reflecting the move away from print-only publications to multi-platform properties – a move welcomed by Rufus Olins, Chief Executive, Newsworks, who said it was “a step in the right direction,” and was “good to see newspapers being recognised as multi-platform brands and all of their revenues correctly attributed.”

Digital boost

“The increase in granularity shows just how vital digital is to the wider market,” says Tim Elkington, Director of Research and Strategy, IAB UK. “Digital is making a really positive contribution to the advertising economy – whether you consider the internet advertising total or the contribution that it makes to individual media.

“This new way of presenting the numbers is welcomed by the IAB, as something that will aid the industry in understanding the market better.”

Suzy Young, Warc’s Data and Journals Director, explains how Britain’s changing media consumption patterns have led to this important adjustment in the way the data is now reported: “Over the past few years we’ve seen dramatic changes in the way people watch TV and films, read newspapers and enjoy magazine content,” she says.

“To reflect this shift driven by the rapid increase in media consumption over the internet, we now allow subscribers to view and analyse the data and forecasts in new ways. We believe this unique approach is a truer representation of today’s changing media landscape and provides a view of adspend that is relevant to agencies, advertisers and media owners.”

Tim Lefroy, Chief Executive at the Advertising Association added: “These figures are good news for our industries but there is a bigger picture. Advertising does not just track GDP, it drives it. The return to pre-recession levels of spending will have an impact not just on ad-land but the economy at large.”