UK advertising spend is predicted to improve in the second half of this year, reaching £35.7 billion – a figure that reflects the return to key online formats.
The latest AA/WARC Expenditure Report shows ad spend saw a stable first quarter in 2023, with spending remaining flat with minimal year-on-year growth of 0.1%, reaching a total of £9 billion.
The overall outlook for the year was initially muted, largely due to inflationary pressures affecting households and businesses. However, there has been a slight improvement in the outlook for the rest of the year since April’s predictions, with an approximate 2.6% year-on-year growth.
This is highlighted in the prediction of a boost from mediums such as the internet, which now accounts for 76.7% of all spending this year, and is predicted to reach 77.6% next year, in comparison to 75.1% in 2022.
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Looking ahead, such boosts mean the UK’s ad market is predicted to grow by 4% in 2024, reaching a value of £37.1 billion.
In addition, the advertising market is also anticipated to receive a boost from individual events such as the Women’s World Cup and the Para Athletics World Championships, which will particularly benefit TV spots, sponsorships, radio, and out-of-home (OOH) ad spend in the second half of this year.
Furthermore, cinema is projected to see a post-pandemic recovery, with a 20.8% year-on-year growth this year, supported by the release of major films like Barbie, Oppenheimer and Mission Impossible: Dead Reckoning Part One.
Advertising Association CEO, Stephen Woodford acknowledged the slight improvement in the outlook for ad spend growth, particularly in online forecasts, but warned inflation still presented a challenge for marketers and consumers.
“However, with high inflation continuing to depress consumer and business confidence we may end up seeing a real-terms contraction of nearly 4.3% in 2023 for UK advertising investment,” Woodford said.
“The recent higher-than-expected fall in inflation will hopefully continue and with that, we will see confidence begin to build later in the year and into 2024, when the ad market is expected to return to growth.”
