Digital now dominates the UK ad market, with three in every four pounds now going to one of a range of online formats.

New research by AA/WARC says the UK ad sector grossed a record £31.9bn in 2021, up 34.3 percent year-on-year. It says this in partly due to inflationary pressures on the cost of advertising but also a higher than expected growth in online advertising during the year.

The data shows internet ads pend totalled £23.5bn in 2021, equivalent to 73.5 percent of the total. Only China has an equivalent online share as big.

AA/WARC expects the market to grow by 10.7 percent this year to £35.3bn, driven by a higher CPMs and higher demand ahead of the FIFA World Cup. In 2023 there will be further 5.4 percent year-on-year growth to reach £37.2bn.

The latest figures show search, inclusive of ecommerce, was the strongest performer in 2021 – at £11.7bn. With online retail spend of $2,648 per capita, the UK now has the world’s most avid online shoppers. The UK government became the country’s biggest advertiser in the pandemic.

AA CEO Stephen Woodford says: “The UK has held its position in 2021 as the largest advertising market in Europe through the pandemic and is now the third largest in the world, behind the USA and China. While further growth is forecast, inflationary pressures on the cost of advertising, and more generally, due to the ongoing geo-political uncertainties, mean we should be cautious.”

The ‘UK Advertising Adspend Review: The Pandemic Effect’ is published by the UK Advertising Association and includes contributions from WARC; think tank Credos and AA members including Google, Tesco, News UK, UM, ISBA and TV marketing body Thinkbox.