Global Distribution and Competition

The advertising and marketing industry prides itself on being a global hub and centre of excellence with a high propensity to export compared to other service sectors such as architecture and audio-visual services.

Unsurprisingly, the EU and US are the UK’s two main export destinations. The UK has a clear geographical advantage, positioning it as both a key transatlantic business partner and international hub.

Figure 6 shows the geographic spread of UK export destinations.

At an individual country level, the US is by far the largest recipient of UK exports and, in 2021, imported just under £3.9 billion worth of advertising and market research services from the UK. This is up from £1.2bn in 2020, marking a tripling of export value year-on-year. This means that the US accounted for over one-quarter of all exports in 2021 and, of the £3.7bn in growth, the increase £2.7bn in exports to the US made up well over half. It is far too early to tell whether this will be a long-term trend, but we will continue to monitor this going forwards.

This is followed by Germany (£1.36 billion) and then Ireland in third place (£894 million). Interestingly, Spain has dropped seven places to 10th on the list.

Table 1: UK export destination rankings for 2021. Source: ONS UK trade in services: service type by partner country, non-seasonally adjusted (Released: 27 January 2022)

What is notable in the 2021 rankings is the appearance of Australia, the only other non-European country on the list, which has shot up the rankings to break into the top 10 for the first time since we have been tracking this data.

Although, the UK only signed its free trade agreement with Australia in December 2021, the publicity around the trade deal would have benefited UK-Australia trade and encouraged exporters to place the country on a higher priority. We will be eager to see if this is a sustained trend or a one-off event.

Asia and the Middle East continues to grow in significance, but they remain behind their US and European counterparts by some margin. What will be of interest in future reports is how UK exports to China fare. China is the world’s second largest advertising market and UK exports to China had been growing steadily until it was disrupted by the pandemic. But now that China has emerged from its lengthy zero-COVID policy and international travel to China has reopened in January, going forward we expect that there will be greater opportunity for UK industry to expand its business there.

Figure 7. An international comparison of the UK’s advertising and market research export competitiveness. Source: OECD.Stat database (OECD 2023). Based on EBOPS 2010 classification for international trade in services.

The data used to generate the chart (Figure 8) was taken directly from the OECD.Stat database which uses the EBOPS (Extended Balance of Payments Services) 2010 classification which matches the standard published by the ONS. The OECD database provides standardised view of member countries’ exports and in particular the trade in advertising, marketing and polling services. Unfortunately, the data is lagged so we only have data up to 2020.

When we examined the UK’s international competitiveness in last year’s report there was some concern that European countries such as the Netherlands and Germany were gaining ground. Encouragingly, it appears that both countries’ exports have fallen sharply in 2020 compared to 2019 and are no longer challenging the UK’s second place ranking behind the US.