Advertising expenditure in the UK reached £17,176bn in 2012, up 2.3% on 2011 according to figures released today in the AA/Warc Expenditure Report. The last time advertising spend exceeded £17bn was prior to the recession in 2007 (£17,364bn).
AA/Warc’s forecasts for the next eight quarters show adspend continuing to grow, reaching a 5% growth rate in 2014, well ahead of inflation. Growth of 2.7% is expected in 2013.
The AA/Warc Advertising Expenditure Report is the definitive measure of advertising activity in the UK. As the only impartial source of quarterly adspend figures and forecasts, with both a total market and individual media breakdowns, it is considered the most reliable picture of the industry by advertisers, agencies and media owners.
|UK ADVERTISING EXPENDITURE 2012–2014||Adspend 2012 (£m)||2012 vs 2011||Forecast 2013||Forecast 2014|
|(% change)||(% change)||(% change)|
|of which broadcaster VOD||104||73.3%||44.2%||33.3%|
|Out of home||970||9.5%||-2.1%||3.9%|
|of which digital||155||29.3%||26.3%||20.3%|
|of which digital||129||1.4%||5.3%||3.5%|
|of which digital||235||1.5%||2.2%||8.5%|
|excl. TV VOD, digital adspend for newsbrands and magazine brands||4,797||13.0%||9.1%||8.1%|
|TOTAL UK ADSPEND||17,176||2.3%||2.7%||5.0%|
|The total UK adspend value of £17,176m can be arrived at in two ways: 1) By summing the values highlighted in grey or 2) Using the total internet value of £5,420m and excluding broadcaster VOD and digital revenues for newsbrands and magazine brandsBroadcaster VOD adspend and digital revenues for newsbrands and magazine brands are included within the internet total of £5,420m.Internet includes revenues for online, mobile and tablet.|
|* There is no year on year comparison available for direct mail due to a change in data collection methodology in 2012.|
|Source: AA/Warc Expenditure Report 2013|
- Out of home advertising enjoyed a strong performance in 2012 as a direct result of an Olympic boost in Q3, but AA/Warc forecasts a decrease in 2013
- National newsbrands saw a decline of -6% in 2012, with zero growth predicted for 2013 but +2.7% growth in 2014, driven partly by a strengthening economy plus a strong increase in digital adspend at +20.3%
- It is the same scenario for magazine brands in 2014, where digital revenues will power overall growth of +1.1%.
New to this release is an important change in methodology that allows subscribers to view the impact of online adspend for newsbrands, magazine brands and TV (see table). Newspapers become ‘newsbrands’, and magazines ‘magazine brands’ reflecting the move away from print-only publications to multi-platform properties. Data is provided for print, digital and the two combined. For TV, users can now see adspend for video on demand. Internet adspend can be viewed as both an overall total (incorporating spend from TV, newbrands and magazine brands), or as an internet ‘pure play’ (internet-only businesses) data series. This approach is a truer representation of today’s media landscape and provides a view of adspend that is relevant to agencies, advertisers and media owners now and into the future.
The industry comments on the impact of the methodology change:
Barry McIlheney, CEO, The PPA: “The PPA welcomes this move by the Advertising Association and Warc, which provides a much more complete picture of advertising revenues across magazine brands’ print and digital channels. Our sector has a rich heritage in print but today’s magazine brands are expanding their reach across a growing number of platforms and influencing more consumers than ever before.”
Neil Mortensen, Research and Planning Director, Thinkbox: “The new methodology brings greater clarity to how advertising budgets are being invested, which can only be a good thing. Now that it credits online revenues to the correct media, it is a more accurate reflection of the landscape and shows how established media are expanding through digital technologies. We welcome the greater clarity and this new approach should provide even more confidence that TV is an expanding medium.”
Rufus Olins, Chief Executive, Newsworks: “We welcome this response to the dramatic changes in our media landscape – a step in the right direction. It is good to see newspapers being recognised as multi-platform brands and all of their revenues correctly attributed. We look forward to seeing further granularity as the expenditure reports evolves to reflect the different streams of digital and online revenue.”
Tim Elkington, Director of Research and Strategy, IAB UK: “The increase in granularity shows just how vital digital is to the wider market. Digital is making a really positive contribution to the advertising economy – whether you consider the internet advertising total or the contribution that it makes to individual media. This new way of presenting the numbers is welcomed by the IAB, as something that will aid the industry in understanding the market better.”
Suzy Young, Warc’s Data and Journals Director, explains how Britain’s changing media consumption patterns have led to this important adjustment in the way the data is now reported: “Over the past few years we’ve seen dramatic changes in the way people watch TV and films, read newspapers and enjoy magazine content. To reflect this shift driven by the rapid increase in media consumption over the internet, we now allow subscribers to view and analyse the data and forecasts in new ways. We believe this unique approach is a truer representation of today’s changing media landscape and provides a view of adspend that is relevant to agencies, advertisers and media owners.”
Tim Lefroy, Chief Executive at the Advertising Association concludes “These figures are good news for our industries but there is a bigger picture. Advertising does not just track GDP, it drives it. The return to pre-recession levels of spending will have an impact not just on ad-land but the economy at large.”