NEWS29 July 2021

Advertising spending forecasts upgraded for 2021

Covid-19 Media News Trends UK

UK – Advertising spending in the UK is anticipated to rise 18.2% this year to a total of £27.7bn, according to projections from the latest Advertising Association (AA) and Warc expenditure report.

Piccadilly Circus advertising

The report estimates that the growth in 2021 will recover the £1.8bn decline in ad spending in 2020, and will continue to grow in 2022, with a rise of 7.7% expected for that year.

The 18.2% rise would be the largest on record, surpassing a previous high of 15.9% in 1988, and is an upward revision from April’s estimate of a 15.2% increase in 2021.

The projections for 2021 include an estimated 54.7% year-on-year rise in advertising spending in the second quarter of 2021.

However, actual advertising spending in the first quarter of 2021 showed a 0.8% increase, compared to projections in April of 1.8% growth.

The figures would mean that the UK is on course to achieve the fastest recovery in the advertising trade among any major European market this year.

Media most affected by Covid-19 restrictions are expected to see the strongest results this year, with rises in advertising spending anticipated for cinema (+315.6%) and out-of-home (+29.3%) with digital out-of-home up 43.7%.

Online display, including video and social media, is expected to grow 17.2% and search is anticipated to increase 19.7%.

Television advertising spending forecasts have been upgraded from an 8.8% increase to 15.1% following a successful Euro 2020.

Stephen Woodford, chief executive at the AA, said: “These are hugely encouraging figures for the UK advertising industry and reflect the strong outlook in the wider economy.

“If the AA/Warc expenditure estimates turn out as forecast, then the ad industry will contribute strongly to the nation’s economic resurgence this year and into next.”

James McDonald, head of data content at Warc, said: “Seventy pence in every pound spent on UK advertising is invested in digital formats, a rate which accelerated greatly last year and is now surpassed only by China.

“It is these formats that will lead absolute growth over the coming terms and none more so than paid search, which is seen to be benefitting from burgeoning e-commerce trade.”

Caroline Dinenage, UK culture minister, said: “It is brilliant to see that, following a record year, the future of UK advertising is set to deliver bright prospects for the entire media landscape.

“With the UK having the fastest growth in Europe, we should take pride in the excellence of this industry and its vital contribution as we build back better from the pandemic.”

@RESEARCH LIVE

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