U.K. Adspend Projected for 5.8 Percent Increase

Advertising spend in the U.K. is expected to rise by 5.8 percent this year to reach £38.8 billion ($48.5 billion), with a further 4.5 percent increase in 2025 to take the market above £40 billion ($50 billion).

The projections were released in the latest edition of the Advertising Association/WARC Expenditure Report, which found that U.K. ad spend grew by 6.1 percent last year to reach £36.6 billion ($45.8 billion). The market outpaced several European territories last year, including Germany (down 0.7 percent), France (up 2.1 percent) and Ireland (up 3 percent). Per the Advertising Association and WARC, the U.K.’s ad market is on course to end the year some $20 billion larger than those of its closest neighbors.

While the U.K. ad market recorded growth in 2023, this equated to a 1.2 percent contraction in real terms given the high inflation rate. TV took a hit in 2023, slipping by almost 9 percent. For this year, the report projects a return to growth for TV and BVOD gains, boosted by the EUROs, elections in the second half and the Summer Olympics. TV is projected to rise by 2.6 percent in 2024, with a 0.9 percent increase in 2025. BVOD, meanwhile, which rose by almost 16 percent last year, will grow by more than 14 percent this year and then 11 percent next year.

Stephen Woodford, chief executive at the Advertising Association, said: “The continued shift to online advertising formats reflects the changing shape of our economy, with people increasingly shopping online as well as on the high street, and businesses striving to provide the best customer experience in all scenarios. The U.K. advertising industry is much respected around the world, which is why we continue to see the exports of U.K. advertising services grow, an important source of additional revenue for many advertising businesses in a domestic economy that has little-to-no growth.”

James McDonald, director of data, intelligence and forecasting at WARC, added: “Our latest survey of media owners confirms 2023 as a challenging year for most, with few properties recording gains and spend instead further consolidating within search and online display formats—particularly social media. Combined, these digital staples are on course to account for almost four in five pounds spent on advertising in the U.K. next year, up from a share of 51 percent just five years ago.”

McDonald added: “Our forecasts assume that the U.K.’s economy will begin to break from the pattern of stagnation that has come to define recent quarters. Easing inflation over the coming 18 months should encourage more favorable trading conditions within the advertising sector, facilitating growth across a broader range of channels in turn.”