U.K. Adspend Forecast Downgraded

The latest Advertising Association/WARC Expenditure Report has downgraded its 2021 forecast to a return-to-growth of 14.4 percent, which is lower than the 16.6 percent predicted in July.

Growth in 2021 is projected to fall just short of offsetting this year’s losses completely, meaning the U.K.’s ad market is now not expected to recover fully until 2022.

Adspend is forecasted to fall by 14.5 percent this year to £21.5 billion as a result of COVID-19, equating to a loss of £3.6 billion compared to 2019.

The final quarter of this year—traditionally the “Golden Quarter” for retail and adspend because of the Christmas advertising season—is set to see a 10.5 percent drop to a total of £6.2 billion, around £724 million lower than the previous year.

U.K. adspend fell by 33.8 percent in Q2 2020 at the height of the nation’s lockdown. This marked the worst-ever quarter recorded for the U.K.’s advertising industry and contributed to a 14.9 percent drop over the first half of the year, equating to a loss of £2 billion when compared to the same period in 2019.

Stephen Woodford, chief executive of the Advertising Association, commented: “These stark figures demonstrate the strain that all parts of the advertising ecosystem were under during the second quarter. Large parts of our industry and the wider economy were effectively shut down. Events of recent weeks have shown this will be no straight-forward recovery as different parts of our country enter or leave local conditions at varying speeds. We must boost growth and support jobs through an advertising tax credit and a skills program to aid colleagues facing unemployment. It is essential that our workforce, business, and Government work together on the recovery plan for our industry and our country.”

James McDonald, head of data content at WARC, commented: “The latest results show that the U.K.’s advertising industry endured its worst quarter on record during Q2 2020, an unprecedented period in which a national lockdown was imposed in response to the COVID-19 outbreak.

“Advertising trade remains depressed, and the rising likelihood of sustained localized lockdowns over the winter, a disorderly exit from the European Union in December and a prolonged economic recovery embodied by rising unemployment, now leads us to believe that the industry will not fully recoup this year’s losses until 2022.”