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Digital leads UK advertising recovery

01 Dec

UK advertising expenditure is forecast to rise 7% in 2013, according to new data from GroupM, twice as fast as its earlier projection in May.

In its report “This Year, Next Year UK” the media investment company is now predicting that measured ad spending in the UK will hit £13.9bn this year, surpassing the previous peak in the pre-financial crisis year of 2007. It also noted that the growth rate was “comfortably” ahead of the world’s larger mature economies.

Further, adspend for 2014 is anticipated to rise 6%, taking it to a total of £14.8 bn.

“This ad recovery is spectacular, but not a phenomenon,” said Adam Smith, GroupM Futures Director. He pointed out that UK annual GDP had risen around 9% in cash terms since 2008, and annual advertising the same.

“The question is whether advertisers sustain their optimism that UK households are feeling richer, and might actually get richer, between now and the election expected in spring 2015,” he suggested.

GroupM said digital spending would continue to increase its share of measured ad investment and would reach 44% in 2013, up from 40% a year earlier. Overall digital was forecast to rise 17% to £6.1bn.

Smith said that UK paid search had doubled in size since 2008 in cash terms and as a share of all UK marketing investment, helped by the spread of smartphones, tablets and e-commerce.

“We think mobile (including tablets) will furnish 70% of paid search investment growth this year and all of it next year,” he added.

Digital display advertising is expected to rise 17% in 2013, with continued demand for video and social inventory in particular. GroupM noted that programmatic buying of such inventory was now becoming routine and of digital display inventory is now routine for many advertisers, “and their rising appetite will be a theme for 2014”.

TV advertising is predicted to grow 6.8% in 2013, in line with the accelerated market average. The report said that recovery had slowed the loss of ad investment into physical newspapers and magazines to single digits. Despite that, “pressure to innovate across all print assets remains relentless”, it added.

Detailed quarterly advertising expenditure data for the UK from 1982 are available via the AA/Warc Expenditure Report. Latest estimates for total adspend growth in 2013 stand at 3.3%.

Data sourced from GroupM; additional content by Warc staff, 27 November 2013

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