Advertising spend has continuing to recover in the wake of Covid, with the total 2022 Adspend thought to have to reached £34.7bn.
That comes following a strong third quarter, with spending rising 4.3% to £8.5bn between July and September. This was the ninth consecutive quarter of growth.
This is according to the latest figures from the Advertising Association/WARC Expenditure Report, which forecasts further growth in 2023, with the ad market expected to be up 3.8% to £36.1bn.
However, when inflation is accounted for, this equates to a 3.0% real term decline.
This compares to an estimated 8.8% rise between 2021 and 2022.
“The UK 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,” said Stephen Woodford, Chief Executive, Advertising Association.
“Advertising plays a vital role in helping brands communicate with their customers and navigate the cost-of-living pressures that everyone faces. As we publish our new 3-year strategy which puts trusted, inclusive and sustainable advertising at the heart of our mission, we are determined to show the economic and social value of responsible advertising to the UK.”
When comparing the first 9 months of 2022 to 2021, Out of Home and cinema were up 13.2%. Search grew 7.7% and equated to almost 40% of total adspend during Q3.
Social media, included within online display, continued growing (+4.4%), while broadcast video on-demand (BVOD) spend rose by 4.3%.
“With the economy enjoying modest growth in November, and inflation appearing to have reached its peak, it is likely that the UK narrowly avoided slipping into the recession at the end of last year that many had feared – but a downturn now seems unavoidable in 2023,” explained James McDonald, Director of Data, Intelligence & Forecasting, WARC.
“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%, 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 modelling suggests that the slump will be short lived, with advertising investment set to lift by 5% over the first nine months of 2024.“
