Ad spend in the UK is forecast to surpass £20bn for the first time in 2015, driven by digital, according to new figures from the Advertising Association and Warc.
Key findings from the report include:
• Mobile will remain the fastest growing ad medium through 2015, although the rate of growth will slow to 45.5 per cent in two years’ time
• Total internet ad spend growth is also expected to slow, falling to 12.2 per cent in 2015, from 15.6 per cent last year.
• TV ad spend increased by 3.6 per cent last year to £4.6bn, with that rate set to accelerate to 7.3 per cent in 2015.
The report indicates that advertising spend was £17.9bn last year, a 3.9 per cent year on year increase.
That figure is expected to increase by 5.5 per cent this year and 6.5 per cent in 2015, when ad spend will hit £20.8bn, as the UK economy continues its recovery.
Investment in mobile boosted last year’s growth, with mobile ad spend almost doubling (up 95 per cent) to more than £1bn.
Mobile will remain the fastest growing ad medium through 2015, although the rate of growth will slow to 45.5 per cent in two years’ time, the report suggests.
Total internet ad spend growth is also expected to slow, falling to 12.2 per cent in 2015, from 15.6 per cent last year.
By comparison, more traditional ad formats such as TV, radio, out-of-home and cinema are all expected to see growing investment. TV ad spend increased by 3.6 per cent last year to £4.6bn, with that rate set to accelerate to 7.3 per cent in 2015.
The Advertising Association/Warc Expenditure Report is deemed by many as the definitive measure of advertising activity in the UK. It is the only source that uses advertising expenditure gathered from across the entire media landscape, rather than relying solely on estimated or modelled data.
The forecasts also reveal that display advertising enjoyed a turnaround in the second half of 2013, experiencing a 5% growth – its best performance since the recovery in 2010.
Spend on recruitment advertising also enjoyed a better year, rising by almost 4% in Q4 after losing over 60% of its value since 2007. The report’s authors suggest that as the economy and job market improves, investment in recruitment advertising is expected to grow more than 1% this year and over 3% in 2015.
The report strips out growth for broadcast video on demand for the second year, showing the rate decelerating to 21.2 per cent, from 73.3 per cent in 2012. TV ad spots, by comparison, are expected to see spend rise this year to 5.5 per cent, boosted by the football World Cup.
“Another set of positive indicators to support the growth story – every pound spent on advertising returns six to GDP,” said Tim Lefroy, chief executive at the Advertising Association.
“The forecast explosion in mobile advertising and digital formats points to UK advertising at the centre of a global revolution in consumer information, service and choice.”
Analysis- rising costs mean advertisers need to get personal
Pierre Naggar, Managing Director EMEA at Turn, comments: “As mobile ad spend continues to grow and more companies take up advertising on mobile, there will be increased competition to deliver a more personalised advertising experience to on-the-go consumers on the device they are engaging with at that moment. If they are to avoid being hit by rising ad costs, brands will need to look at the habits of their competitors by measuring trends in advertiser share of voice in order to realise the best opportunities to communicate with consumers – the impetus is on modern-day marketers to showcase ROI in new ways.
“Many marketers are making their digital advertising offerings more innovative and efficient, using programmatic, real-time systems and algorithms to automate data-driven, targeted communications with consumers. However, when millions of advertisers, both big and small, are contending for the attention of increasingly distracted consumers in this evolving advertising market, success will hinge on building digital advertising campaigns which deliver quality and relevant ads to your target audience as they move across screens.”
Read the full report here