Advertising spend in the U.K. is projected to rise by 15.2 percent this year to reach £27 billion ($38 billion), recovering the £1.8 billion ($2.5 billion) lost last year amid the pandemic, according to the latest Advertising Association/WARC Expenditure Report.
U.K. ad revenues are expected to rise by 7.2 percent in 2022 to reach a record £29 billion ($40 billion), the report says.
Cinema, digital and traditional out-of-home and online classified will all recover 2020’s losses this year. It will take longer for television to recover, having fallen by almost 12 percent last year to £4.35 billion ($6.1 billion), with just an 8.8 percent gain projected for this year. Within TV, VOD rose by 15.7 percent last year and is expected to see double-digit gains this year and next. Online display, including social media and online video, was up 10.4 percent to £7.1 billion ($10 billion) in 2020 and will see a 13.4 percent gain this year.
“Advertising investment has mirrored the rapid changes seen across the economy over the last year, primarily the acceleration provided by lockdowns towards e-commerce across all sectors able to sell online,” said Stephen Woodford, chief executive of the Advertising Association. “The pandemic accelerated trends that were already changing the market, evident for several years. The U.K.’s sophisticated online advertising marketplace helped to keep the economy moving and, no doubt, supported businesses, large and small, to stay connected with consumers who were no longer on the high street. SMEs that had little or no online presence quickly adapted to serve their customers via online platforms and more sophisticated online businesses increased their investment behind these. Across the economy that advertising serves we saw remarkable innovation and agility, which helped to lessen the economic impact as firms adapted to keep serving their customers, despite the disruption. The predicted growth this year of 15.2 percent is good news, with every £1 of advertising spend generating £6 of GDP, this will be a welcome boost for jobs and growth in the wider economy.”
James McDonald, head of data content at WARC, noted, “The data from 2020 were unlike any we have seen in our 40 years of market monitoring. Save for a flock of online pure-players, the majority of media owners surveyed by WARC experienced their worst trading climate in living memory. This was true at both the financial and the human level—many will not witness a full recovery until 2022 at the earliest.
“Agile formats with short lead times were seen to flourish last year, particularly within social media and e-commerce environments, the latter benefitting greatly from stay-at-home orders and well-established logistical networks. Media owners in these spaces are expected to build on good 2020 results this year, though the situation will be more challenging across the remainder of the landscape as ad investment continues to favor performance marketing.”