UK Advertising Grows 2.5% To £17.2bn In 2003

UK advertising expenditure for 2003 exceeded expectations and rose by 2.5% to £17.2 billion. Figures released by the Advertising Association (AA) and World Advertising Research Centre (WARC) show that the market has outperformed predictions. A consensus of recent forecasts compiled by MediaTel INSIGHT predicted growth of 1.7% for the year.

Cautious forecasting and low expectations for this year’s results were inevitable due to weak business and financial market conditions weighed by the war on Iraq. In real terms, that is after adjusting for inflation, expenditure was down by 0.4% on 2002. Quarter three figures showed the weakest growth, at just 0.2% in current prices.

UK Advertising Expenditure 2003
	Spend (£m)	Year on Year Change (%)
		Current prices	Constant prices*
National newspapers	1,902	-1.6	-4.4
Regional newspapers	2,986	3.2	0.2
Consumer magazines	784	-0.2	-3.0
Business & Professional	1,048	-3.6	-6.4
Directories**	1,040	5.0	2.0
Press production costs	634	-1.4	-4.2
TOTAL PRESS	8,393	0.7	-2.1
of which display	4,224	-1.4	-4.2
of which classified	4,169	3.0	0.1
Television	4,374	1.0	-1.9
of which production costs	656	1.0	-1.9
Direct mail	2,431	2.2	-0.7
Outdoor & Transport	901	10.4	7.3
Radio	582	6.8	3.8
Cinema	173	-3.7	-6.5
Internet**#	376	61.6	57.0
TOTAL ALL MEDIA	17,231	2.5	-0.4
Source: Advertising Association, March 2004
*Constant price percentage changes are inflation-adjusted using the retail price index
**Figures for 2003 are latest WARC estimates
#Internet data includes advertising expenditure on specialist recruitment websites

Internet advertising is estimated to achieve the biggest growth in 2003, jumping 61.6% to £376 million, including recruitment advertising estimates of £51 million. If predictions are accurate, internet spend excluding recruitment advertising will reach £325 million – a 64.9% rise over 2002 and in line with industry predictions.

The strongest performance of 2003 was in Q4 where outdoor and radio both grew significantly. Conversely, financial press and business magazine advertising figures were particularly affected by the weak financial sector.

Outdoor achieved an overall increase of 10.4% to £901 million whilst the radio sector increased by 6.8% to £582 million (before inflation).

2003 Expenditure & Total Display Advertising Expenditure
	2003 % share of
	Display & classified	Total display
Press	48.7	32.3
TV	25.4	33.5
Direct Mail	14.1	18.6
Outdoor & Transport	5.2	6.9
Radio	3.4	4.5
Internet#	2.2	2.9
Cinema	1.0	1.3
#Latest WARC estimate

The press continues to take the largest share of advertising expenditure, at 48.7%, with television having the second largest share of 25.4%.

Press advertising in regional newspapers grew by 3.2% and television expenditure rose by 1.0% to £4.4 million in nominal terms. However, growth was not experienced by all sectors; cinema advertising fell from £180 million to £173 million and consumer magazines fell from £785 million to £784 million.

The AA’s advertising statistics year book will be released in June 2004.