UK ad spend is on the rise, helped by the Euros and General Election.
According to the latest Advertising Association/WARC Expenditure Report, ad spend during the first quarter of the year was up 9.3% to £9.2bn and that’s anticipated to hit £9.7bn in the second quarter.
By the year end, the report’s authors expect a 7.7% rise in advertising spending, taking the total to £39.4bn.
The growth is ahead of forecasts, mainly due to stronger-than-expected online growth – this accounted for 79.7% of all UK spend in Q1 2024.
“It is welcome news to see real-term growth and upgraded forecasts in the advertising market in Q1 this year, a positive sign that our industry is one of the driving factors in the UK’s economic recovery,” said Stephen Woodford, Chief Executive, Advertising Association.
“This is a timely reminder of its dynamism as the new Government seeks to create an environment for growth, through political stability and a new industrial strategy. Advertising is a UK-wide industry, with three in five advertising jobs based outside of London and it is central to the successful development of the digital economy across the whole country.”
With the men’s Euros and the snap General Election, in Q2, AA/WARC forecasts spend during the first half of the year to rise 9.3% to £18.9bn.
Overall, this year, channels expected to see a boost include Out of Home (+12.5%), Search (+10.1%) and Radio (+5.5%). Advertising spend on the Broadcaster Video On-Demand (BVOD) portion of TV is set to cross the £1bn threshold for the first time (an increase of 13.7%), driven by a strong summer of sport including demand from the Men’s Euros, and to a slightly lesser extent, the upcoming Olympics and Paralympics.
In 2025, the UK ad market is set to rise 5.5% and reach £41.6bn.
“The race for AI adoption has intensified in the advertising industry, with major online platforms introducing their own solutions to market and subsequently reporting a positive contribution to their bottom line. The true impact of these tools will emerge in time, though first quarter results were certainly lifted by higher ad loads and associated performance costs online,” explained James McDonald, Director of Data, Intelligence & Forecasting, WARC.
“That said, the enduring strength of legacy display media – chiefly TV, out of home, radio and cinema – was also evident in the first quarter, and we expect this to have sustained into the second due in part to short term stimuli such as the Men’s Euros and snap General Election. Overall, our outlook for the coming year is brighter than our last projection in April, with a forecast 7.7% rise in total ad spend this year ahead of the average rate recorded before the pandemic.”
