AA/WARC: Advertising spend in the UK is forecast to hit £35bn in 2022

Posted on: Friday 04 November 2022 | IAB UK

Adspend for the final quarter of 2022 is projected to increase by 4.5% from last year’s record high, with spend nearing £10bn during the Christmas World Cup period


The latest Advertising Association/WARC Expenditure Report has forecast the value of the UK’s advertising market will grow by 9.2% in 2022, to a total of £34.9bn, a slight downgrade of 1.7pp from the previous forecast in July. This is due to high levels of inflation and squeezed margins as the UK deals with supply chain inflation and subsequent rise in the cost of living. Within the media sector, advertisers are also facing higher media costs.

UK ad spend rose by 8.8% in Q2 2022, to a total of £8.6bn, while spend during the first half of the year was up 14.4% at £16.7bn. Advertising spend is projected to near £10bn during Q4, featuring the combination of Christmas and the World Cup.

Online advertising’s share of total ad spend is set to grow to a total of 74.% for 2022 and is expected to rise to 75.2% in 2023. Figures from our Digital Adspend study with PwC for Q1 2022 shows online classified advertising - including recruitment advertising and property listings - was up by almost a third. Broadcaster video-on demand continued to grow (+9.3%) as audiences turned to catch-up and streaming platforms.

Ad spend for the final quarter of 2022 is set to increase by 4.5% from last year’s record high, to a total of £9.5bn, setting a new record level of investment during the Christmas period. Search advertising – including ecommerce – is forecast to be one of the quickest growing media over the quarter, rising by 7.3% to a total of £3.4bn. Video-on-demand stands out amongst the wider market with expected growth of 4.2%.

Stephen Woodford, Chief Executive, Advertising Association commented: “It is encouraging to see strong figures in Q2, with media channels continuing their recovery from the COVID-19 pandemic. Looking forwards, political and economic stability is much-needed, given the inflationary and recessionary forces impacting all businesses. As companies navigate these pressures, we see them continuing to prioritise advertising investment to protect their brands in exceptionally challenging market conditions.”

 

Media

Q2 2022

year-on-year % change

H1 2022 year-on-year % change

 

2022 forecast year-on-year % change

Percentage point (pp) change in 2022 forecast vs July

2023 forecast year-on-year % change

Search

10.8%

16.5%

11.7%

-1.5pp

6.2%

Online display*

5.4%

8.1%

7.1%

-4.3pp

5.9%

TV

-0.6%

8.7%

2.9%

-3.0pp

0.5%

  of which VOD

9.3%

17.2%

10.1%

-3.2pp

7.2%

Online classified*

32.4%

41.4%

20.1%

+14.5pp

-4.5%

Direct mail

3.8%

9.5%

2.8%

+3.0pp

-4.5%

Out of home

46.4%

79.1%

31.2%

+2.3pp

4.8%

  of which digital

48.2%

78.8%

32.3%

+1.8pp

8.4%

National newsbrands

9.1%

12.6%

3.4%

+2.3pp

-2.5%

  of which online

13.2%

16.3%

8.2%

+1.6pp

3.7%

Radio

7.0%

13.1%

6.2%

+0.8pp

0.1%

  of which online

5.9%

14.6%

8.1%

-2.6pp

6.3%

Magazine brands

3.3%

5.0%

0.7%

+2.0pp

-5.9%

  of which online

3.9%

9.9%

5.4%

+1.4pp

-1.7%

Regional newsbrands

0.6%

10.3%

2.6%

+2.6pp

-7.1%

  of which online

5.3%

13.8%

7.2%

-0.8pp

-0.5%

Cinema

2,208.2%

3,978.0%

174.0%

-17.2pp

21.1%

TOTAL AD SPEND

8.8%

14.4%

9.2%

-1.7pp

3.9%

Note: Broadcaster VOD, digital revenues for newsbrands, magazine brands, and radio station websites are also included within online display and classified totals, so care should be taken to avoid double counting. Online radio includes targeted in-stream radio/audio advertising sold by UK commercial radio companies, together with online S&P inventory.

Source: AA/WARC Expenditure Report, October 2022

The Advertising Association/WARC quarterly Expenditure Report is the definitive guide to advertising expenditure in the UK with data and forecasts for different media going back to 1982.

Written by

IAB UK

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