AA/WARC: 4 Percent Growth for UK Advertising in 2023

The ad market in the U.K. is expected to rise by 3.8 percent this year to reach £36.1 billion ($44.7 billion), per new data from the Advertising Association/WARC Expenditure Report, as compared with the 8.8 percent growth rate in 2022.

In Q3, ad spend increased by 4.3 percent to hit £8.5 billion ($10.5 billion), marking the ninth consecutive quarter of growth. TV was down 6.6 percent but BVOD rose 4.3 percent. For the year, AA/WARC projects the ad market was worth £34.7 billion ($43 billion). Accounting for inflation, growth was flat, AA/WARC said. Q4 growth was projected at 4 percent, thanks to the holiday season and the FIFA Men’s World Cup. For 2023, TV is expected to be flat, rising just 0.4 percent, of which BVOD will be up 4.4 percent.

Stephen Woodford, chief executive of the Advertising Association, said: “The U.K. advertising industry has held firm in its continued recovery from the Covid pandemic, with ad investment holding up in the face of significant headwinds. However, the economic pressures of 2022, including high inflation’s impacts on the wider economy and on media costs, means in real terms spend is likely to be flat. These pressures all contribute to slower growth projections for the year ahead.”

James McDonald, director of data, intelligence and forecasting at WARC, added: “With the economy enjoying modest growth in November, and inflation appearing to have reached its peak, it is likely that the U.K. narrowly avoided slipping into the recession at the end of last year that many had feared—but a downturn now seems unavoidable in 2023.

“Despite an air of resilience in recent market results, a looming recession will put pressure on ad trade this year. We foresee ad market growth easing to 3.8 percent, equating to a real terms decline and the weakest rise in a decade if the pandemic-hit 2020 were excluded. The silver lining here is that our current modeling suggests that the slump will be short lived, with advertising investment set to lift by 5 percent over the first nine months of 2024.”