U.K. Set for Ad Recovery

Ad spend in the U.K. will recover faster than other key international markets this year, according to the new Advertising Association/WARC Expenditure Report.

The report expects the U.K.’s advertising market to expand by 15.2 percent in 2021, an upgrade of 0.8 percentage points from the last forecast in October 2020.

In 2020, U.K. ad revenues were down about 8 percent to £23.2 billion. This is a 6.6 percentage point improvement on the previous forecast, with online platforms helping to boost the sector.

In 2021, the report expects U.K. ad revenues will reach £26.7 billion, topping the £25.4 billion recorded in 2019. In addition, the Advertising Association/WARC Expenditure Report says that the U.K.’s losses in 2020 were below the global rate of 10.2 percent and the European rate of 13.7 percent. Moreover, the 2021 growth rate will be ahead of key markets such as the U.S. (3.8 percent), Germany (9.3 percent), Europe excluding the U.K. (8.8 percent) and China (10.3 percent).

By medium, TV was down 9 percent in 2020 but is expected to rebound by 11.6 percent in 2021. VOD within the TV segment rose 4.3 percent in 2020 and is expected to rise by 21.2 percent in 2021.

“The latest figures from the AA/WARC Report come as welcome news at the beginning of the year,” said Stephen Woodford, chief executive of the Advertising Association. “Not only does the data show the overall decline expected in 2020 may be less than feared, but the recovery in 2021 will be stronger than we would have dared hope even a few months ago. With the vaccine rollout accelerating and a Brexit trade deal in place, the 2021 business outlook is brightening, reflected by these new forecasts showing a stronger and quicker recovery in ad spend, with a stronger rebound than in other large economies. With every £1 of advertising spend generating £6 of GDP, this is good news for jobs and growth in the wider economy.”

James McDonald, head of data content at WARC, added, “The latest market data show that the largest online properties were shielded from the worst of the industry downturn last year. Indeed, with consumption and commerce migrating online during the pandemic, the results show that ad money followed to these platforms’ benefit.

“The outlook for the year ahead is bullish, reflecting greater certainty around Brexit and the potential for the vaccination program to unlock economic growth. We now believe that the ad market can overcorrect in these circumstances to top its 2019 peak, though large parts of the industry remain in a fragile state.”