NEWS27 July 2017

2017 starts in growth for UK ad spend

Media News Retail Trends UK

UK – UK ad spend grew 1.3% year-on-year in Q1 2017, the 15th consecutive quarter of growth, although the slowest in four years, to reach £5.3 billion according to figures from the Advertising Association and Warc.

Digital ad growth crop

The growth was achieved despite TV ad spend dropping -6.2%, its first fall since 2009, although it is forecast to grow again in 2018 by 2.5%. Broadcaster video-on-demand did increase 7.2%.

Digital advertising channels that performed well included national newsbrands up 25.4% (accounting for just over a quarter of newsbrands ad revenue), radio increased 8.1% and out of home rose 27.6%. Cinema grew 27.6%.

Internet ad spend increased 10.1% in Q1, mainly driven by mobile which increased 36.2%.

Stephen Woodford, chief executive at the AA said: “As business sentiment suffers, it’s no surprise to see ad-spend come under pressure – but the market overall remains resilient. Beyond these numbers, our sector is a huge source of inward investment and exports and should be a priority for government as we focus on business beyond Brexit.”

James McDonald, senior data analyst at Warc added: “The latest data shows that large retailers – particularly supermarkets – and major food brands reined in their TV spending by 25% during the first three months of 2017, instead committing to cutting prices on the shelves as household expenditure wanes.”

The full year outlook for 2017 has been downgraded by -0.5pp to 2% growth, but is forecast to recover by 2018 at 2.6% growth, driven by the men’s football World Cup and a likely improvement in certainty around the terms of Brexit.