AA/WARC: UK ad spend set to surpass £29 billion
Posted on: Thursday 28 October 2021 | IAB UK
Ad spend over the Christmas period stands to be the highest on record - with £7.9bn ad spend forecast - as search advertising’s ascent continues
The latest Advertising Association/WARC Expenditure Report forecasts UK ad spend will grow by 24.8% this year, reaching a total of £29.3bn. This surpasses July’s projection (+18.2%) by 6.6 percentage points, making this the largest annual rise on record. As the Christmas advertising season approaches, total investment for Q4 2021 is expected to be £7.9bn, again the highest level ever recorded.
The latest report also features projections for 2022, with a 7.7% increase year-on-year to more than £31.5bn. Media channels heavily affected by the pandemic, cinema (+123.2%) and out-of-home (+27.7%) are also set for significant recovery. Search, which includes ecommerce spend, is set to continue its rise (+11.4%).
These figures, combined with forecasts from WARC, indicate the UK is set to achieve the fastest ad trade recovery of any major European market in 2021, reaffirming a rebound from UK advertising’s £1.8bn decline in 2020.
Double-digit recovery confirmed in Q2 2021
Advertising spend rose 86.5% to reach £7.7bn in Q2 2021, led by sectors such as out-of-home (+276.8%) and digital magazine brands (+155.5%) as the nation emerged from the third coronavirus lockdown.
While the half-year figures show a slower recovery for newsbrands, their online ad revenues still saw double-digit growth (+22.2% national digital and +28.0% regional digital).
Christmas ad spend led by online shopping
Total ad investment is forecast to be £7.9bn during Q4 2021, the highest level ever recorded during the Christmas period and almost £1bn more than last year (£929m). Search advertising is forecast to be one of the quickest growing media in Q4 2021, with a 15.3% increase to £2.7m, boosted by consumers’ online shopping habits.
Stephen Woodford, Chief Executive, Advertising Association commented: “UK advertising’s recovery goes from strength-to-strength, following the sharp shock of the pandemic. Ad spend is set to grow by 24.8% to a record £29.3bn, proving advertising’s role as a vital engine for growth in the UK economy, particularly during the upcoming Christmas period. The forecast of strong online performance is further evidence of the UK’s position as the world’s most digitally advanced advertising market and Europe’s biggest.”
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