U.K. Adspend Forecast to Rise 18 Percent This Year

Advertising spend in the U.K. is projected to increase by 18.2 percent this year to reach £27.7 billion ($38.5 billion).

The Advertising Association/WARC Expenditure Report previously projected a 15.2 percent gain for this year. The report points to the significant gains in Q2, with ad revenues up an estimated 54.7 percent.

This year’s gains will completely recover last year’s whopping pandemic-related £1.8 billion ($2.5 billion) decline. WARC also expects 2022 to be upbeat, forecasting a 7.7 percent increase to reach a record £30 billion ($41.7 billion).

An 18.2 percent rise this year would set a new record for the U.K. ad market. WARC also suggests that the U.K. is on track to achieve the fastest ad trade recovery of any major European market this year.

Online display, which includes social media and online video, is expected to see a 17.2 percent gain. Television will rise by 15.1 percent, lifted by coverage of the Euros.

“It is brilliant to see that, following a record year, the future of U.K. advertising is set to deliver bright prospects for the entire media landscape,” said Caroline Dinenage, culture minister. “With the U.K. having the fastest growth in Europe, we should take pride in the excellence of this industry and its vital contribution as we build back better from the pandemic.”

“These are hugely encouraging figures for the U.K. advertising industry and reflect the strong outlook in the wider economy,” commented Stephen Woodford, chief executive of the Advertising Association. “Advertising is a vital engine for growth, with each £1 invested in advertising delivering £6 back to GDP. The upward growth revision in spend growth this year—to reach a record of 18.2 percent—would mark an exceptional recovery, after the record declines in 2020. U.K. adspend growth also looks set to race ahead of European markets, reflecting the success of the vaccine rollout and fast-rising corporate and consumer confidence. The U.K. is the global hub for advertising and will also benefit from faster growth in major export markets for U.K. advertising services. If the AA/WARC expenditure estimates turn out as forecast, then the ad industry will contribute strongly to the nation’s economic resurgence this year and into next.”

James McDonald, head of data content at WARC, added, “Seventy pence in every pound spent on U.K. advertising is invested in digital formats, a rate which accelerated greatly last year and is now surpassed only by China. It is these formats that will lead absolute growth over the coming terms and none more so than paid search, which is seen to be benefitting from burgeoning e-commerce trade. Our forecast update since April is demonstrative of the current strength of this sector in particular, though it is notable that online formats across the board are set to see growth after a tumultuous 2020. That the ad market will generate more value this year than before the crisis is testament most to its role within the lives of the connected consumer.”