UK advertising spend rose 3% in the first six months of 2013, driven by a fast take up of mobile and search ad placements, according to the latest Advertising Association/Warc Expenditure Report.
Total adspend was £8.54bn in H1 following growth of 2.3% in 2012 when spend reached £17.2bn, returning to pre-recession (2007) levels.
The H1 increase was driven by growth of internet pure play (+16.3% YOY), out of home (+3.1% YOY) and TV (+2.1% YOY), offsetting declines for all other media (see table below).
Strong growth for mobile (+128%) and search (+18%) helped drive total internet adspend up for the period. Out of home experienced a strong second quarter (+5.9%) after a flat start to the year.
Forecasts for 2013 and 2014
AA/Warc full year adspend forecasts have been upgraded from the July 2013 report and now stand at 3.3% growth for 2013 (+0.7pp) and 5.2% for 2014 (+0.3pp), with expenditure set to reach £17.7bn in 2013, and an all-time high of £18.7bn in 2014.
The forecasts have been revised to reflect the better than expected outlook for search and TV advertising spend, as well as the improved economic scenario for the UK next year.
Tim Lefroy, Chief Executive of the Advertising Association said: “These numbers suggest growing confidence and that is good news – not only for UK advertising but for the consumer goods, digital and creative industries it underpins.”
Comments on the table
* Includes TV spot advertising and broadcaster only VOD.
** Excludes broadcaster only VOD, digital adspend for newsbrands and magazine brands
*** Direct mail data for H1 2013 are Warc estimates.
Methodology for Warc’s quarterly forecasts
Analysis of annual adspend data over the past 30 years shows that there is a link between annual changes in GDP and annual changes in adspend (after allowing for inflation, and excluding recruitment adspend). Over this period, GDP changes account for about two thirds of the change in adspend. Warc has developed its own forecasting model to generate forecasts for two years based on assumptions about future economic growth. The model provides an indication of likely overall spend levels – adjusted to allow for short-term factors (Olympics, World Cup etc).
The Expenditure Report (www.warc.com/expenditurereport) launched in February 2010 and is available exclusively online. Alongside over 200 standard tables, subscribers can create their own customised tables for analysis of different media and time periods, as well as track the different media’s share of adspend. All reports can be exported from the online interface. An annual subscription costs £710 for AA members and £1,100 for non-members.