UK adspend to hit £20bn+ in 2015

Warc, 28 April 2014

LONDON: Total UK adspend is expected to exceed £20bn in 2015 as advertisers invest heavily in digital and mobile channels and confidence in the wider economy grows, new independent analysis has forecast.

According to the latest quarterly Expenditure Report from the Advertising Association and Warc, UK adspend reached £17.88bn in 2013, up 3.9% from 2012, and is expected to rise by 5.5% in 2014 and by 6.5% the following year.

Almost every advertising sector will register spending growth in 2015, the report predicted, with only regional newsbrands expected to post a decline of -3% – yet even this will be an improvement on its -7.3% fall in 2013 – while digital advertising will continue to rise across all media.

Broadcaster VOD, for example, is forecast to build on the 21.2% growth it recorded in 2013 with a further 27% growth predicted for 2014 and 31.3% for 2015, as advertisers respond to the ongoing popularity of catch-up TV channels.

Likewise, mobile expenditure is predicted to continue to grow rapidly after almost doubling in value last year. It grew 95.2% to just over £1bn in 2013 (within total internet adspend of £6.3bn) and is expected to rise by 73% in 2014 and by 45.5% in 2015, the report said.

Traditional media channels are also expected to benefit from investment in digital adspend. Magazines, for example, recorded an overall decline of -5.7% in 2013, but the digital component grew by 7.1% and will continue to rise.

This means digital magazine adspend is expected to offset the decline in print by 2015, giving the sector an overall growth rate of 0.6%.

“The forecast explosion in mobile advertising and digital formats points to UK advertising at the centre of a global revolution in consumer information, service and choice,” observed Tim Lefroy, chief executive of the Advertising Association.

In other findings, out of home performed well in 2013, having built on the gains it made from the big events of 2012, and recorded growth of 2%. It is expected that its trajectory will continue to rise with growth of 4.5% in 2014 and 7% in 2015.

Radio adspend also picked up in the latter part of the year, rising 6.2% in Q4 2013, but overall spend for the year was down -2.9% to £537m. This was because some major events, such as the London Olympics and the Queen's Diamond Jubilee, had boosted revenues in the previous year.

Data sourced from Advertising Association, Warc