The latest Advertising Association/WARC Expenditure Report, the only source to collect advertising revenue data across the entire media landscape, predicts that UK ad spend will grow by 18.2 per cent this year, to reach a total of £27.7bn. That's an increase of £4.2bn from last year, a sign that the advertising industry is growing in confidence.
This is also an upward revision from the 15.2 per cent rise forecast in April and includes an estimated 54.7 per cent rise during the second quarter of the year – by far the highest on record albeit coming on the back of an exceptional downturn due to the pandemic and a sign that the advertising industry is growing in confidence.
Out of Home (OOH) suffered particularly badly in Q1, with spend down by almost two-thirds, as the UK adhered to lockdown and social distancing restrictions. But it is forecast to recover in 2021, with ad spend increasing by 29.3 per cent, and digital OOH spend increasing by 43.7 per cent.
Online display – inclusive of social media and online video – is set to see growth accelerate this year (+17.2 per cent), as is the case for search (+19.7 per cent). TV ad spend is expected to increase by 15.1 per cent in 2021 (a significant upward projection from the 8.8 per cent forecast in April), reflective of increased activity during the Euros.
The latest dataset includes actual ad spend figures for Q1 2021, which show UK advertising spend rose 0.8 per cent to £6.5bn during the first three months of the year. This is behind the 1.8 per cent rise estimated in April.
“70 pence in every pound spent on UK advertising is invested in digital formats, a rate which accelerated greatly last year and is now surpassed only by China. It is these formats that will lead absolute growth over the coming terms and none more so than paid search, which is seen to be benefitting from burgeoning e-commerce trade" said Head of Data Content at WARC, James McDonald. “Our forecast update since April is demonstrative of the current strength of this sector in particular, though it is notable that online formats across the board are set to see growth after a tumultuous 2020. That the ad market will generate more value this year than before the crisis is testament most to its role within the lives of the connected consumer.”