U.K. Ad Spend Hits Record of £21.4 Billion


U.K. advertising expenditure grew 3.7 percent to reach £21.4 billion ($27.5 billion) in 2016, according to the Advertising Association/WARC Expenditure Report, with TV ad spend lifted by growth in VOD revenue.

Growth in U.K. ad spend held steady in Q3 after the June Brexit referendum, before reaching £5.8 billion ($7.4 billion) in Q4 2016, an increase of 3.9 percent year-on-year and the highest grossing quarter on record. After accounting for inflation, U.K. ad spend topped its pre-recession peak for the first time during both the final quarter and for 2016 as a whole. Forecasts for the next two years indicate continued growth of 2.5 percent in 2017 and 3.3 percent in 2018.

Digital formats continued to drive growth in 2016, with internet ad spend up by 13.4 percent to £10.3 billion ($13.2 billion), and mobile accounting for 99 percent of that growth.

TV ad spend was boosted by 12.6-percent growth in VOD revenue and recorded a new high of £5.3 billion ($6.8 billion) in 2016. 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.

Stephen Woodford, the chief executive at the Advertising Association, said: “Advertising has proved resilient to uncertainty and behind these numbers is a cutting-edge, digital business in which Britain is a world-beater. As we work towards Brexit, we’re urging government to support U.K. advertising and do more to unlock its potential to grow UK plc.”

James McDonald, senior data analyst at WARC, commented: “The U.K.’s ad industry is experiencing the most seismic shift since WARC began monitoring in 1982. Last year exemplified this, as over 95 percent of the new money entering the market came from digital formats. The trend will continue as ad tech improves and consumers spend more time with their internet-connected devices.”