The Advertising Association / WARC Expenditure Report
Immediate post-Brexit concerns don’t appear to have impacted the UK’s advertising spend, according to new figures from the Advertising Association / Warc Expenditure Report. The spend on UK advertising grew to £5.8bn, a 3.9% year-on-year rise, in Q4 of 2016 and this marks the highest grossing quarter since the Expenditure Report started in 1982. It also marks an upward trend following flat growth in Q3 in the wake of June’s Brexit referendum.
Digital formats continued to dominate, with the spend on internet advertising up 13.4% to £10.3bn for the year. Mobile accounted for 99% of that growth, with the spend on advertising for mobile platforms up an astonishing 45.4% to £3.9bn. The report predicts the spend on mobile advertising will slow over the coming years as the current boom dies down.
“The most seismic shift in its history”
According to James McDonald, a Senior Data Analyst at Warc, the UK advertising industry is experiencing “the most seismic shift in its history. “Last year exemplified this, as over 95% of the money entering the market came from digital formats. The trend will continue as advertising technology improves and consumers spend more time with their internet-connected devices,” McDonald claims.
Total TV spend is expected to dip this year, before the losses are regained in 2018
Despite such impressive growth for digital advertising channels, the spend on traditional advertising is holding. The spend on TV advertising hit a record high of £5.3bn in 2014. For 2017 video-on-demand is forecast to see growth of 13.7% and 11% in 2018. T. For 2017, VOD is forecast to see growth of 13.7 percent and 11 percent in 2018. TV’s share of overall spend has been holding steady at 25 percent over the last decade. Television ad spend dipped 2.1 percent in the final quarter of 2016, though this was offset by gains earlier in the year, resulting in 0.2 percent growth for 2016 as a whole. Total TV spend is expected to dip this year, before the losses are regained in 2018. TV’s share of overall spend has been holding steady at 25% over the last decade. The spend on TV advertising dipped by 2.1% in the final quarter of 2016, though this was offset by gains earlier in the year, resulting in 0.2% growth for 2016 as a whole. The total spend for TV is expected to dip in 2017, before the losses are regained in 2018. There was also growth for cinema (+8% to £257m) and radio (+5.4% to £646m) in 2016. However, not all traditional advertising channels prospered as the slide in print media continued. Advertising spend on national newspaper brands fell 10% to £10.1bn, while direct mail dropped 10.4% to £1.7bn.