UK ad spend will grow by 24.8 per cent this year to reach a total of £29.3bn, according to the latest Advertising Association/WARC Expenditure Report forecasts. The latest report surpasses July’s projection (+18.2 per cent) by 6.6 percentage points, making this the largest annual rise on record. Total investment for Q4 2021 – the important Christmas advertising season – is expected to be £7.9bn, again the highest level ever recorded.
The latest dataset also includes revised projections for 2022, showing a 7.7 per cent increase year-on-year to more than £31.5bn. The channel expected to see by far the biggest recovery is cinema, not surprisingly, which is forecast to see a 123.2 per cent increase in ad spend compared to a year when cinemas were closed for months on end. Other channels set for a significant recovery include Out of Home, which is forecast to rise by 27.7 per cent, with Digital Out of Home forecast to rise by 36.1 per cent. The growth in search, which includes eCommerce spend, is expected to continue its rise, with an 11.4 per cent increase forecast.
These figures, along with ancillary forecasts from WARC, suggest the UK is still on course to achieve the fastest ad trade recovery of any major European market this year, bouncing back from UK advertising’s £1.8bn decline in 2020.
Q2 2021 ad spend up 86.5 per cent
Actual figures show advertising spend rose 86.5 per cent to reach £7.7bn in Q2 2021, underlining a strong recovery following the unprecedented disruption during the first wave of COVID-19 last year, when UK ad spend fell by 34.1 per cent in Q2 2020 at the height of the nation’s first lockdown.
All media have seen a strong recovery in Q2 2021, led by sectors such as out-of-home (+276.8 per cent), digital magazine brands (+155.5 per cent) and direct mail (+104.0 per cent) as the nation emerged from the third coronavirus lockdown. While the half year figures show a slower recovery for newsbrands, their online ad revenues still saw a double-digit growth (+22.2 per cent national digital and +28.0 per cent regional digital).
Q4 spend set to hit £7.9bn
Total investment during Q4 2021 is expected to be £7.9bn, the highest level ever recorded during the Christmas period and almost £1bn more than last year (£929m). Search advertising is forecast to be one of the fastest growing media in Q4 2021, rising 15.3 per cent to £2.7bn, buoyed by consumers’ online shopping habits.
In addition, TV advertising spend is set to see its largest Q4 increase in over a decade, expected to rise by 9 per cent to £1,564m, with broadcaster video-on-demand up by 24.1 per cent.
“UK advertising’s recovery goes from strength-to-strength, following the sharp shock of the pandemic,” said Advertising Association Chief Executive, Stephen Woodford. “Ad spend is set to grow by 24.8 per cent to a record £29.3bn, proving advertising’s role as a vital engine for growth in the UK economy, particularly during the upcoming Christmas period. The forecast of strong online performance is further evidence of the UK’s position as the world’s most digitally advanced advertising market and Europe’s biggest.”
James McDonald, Head of Data Content at WARC, said the latest figures demonstrate bullish trade in the UK’s advertising sector despite potential inflationary headwinds and supply chain disruption in the run up to Christmas. “Strong fourth quarter projections for TV – a medium heavily leveraged by retailers during the golden quarter – and search, which encompasses activity on eCommerce platforms, suggest it will be largely business as usual for the industry this year,” he said.