Online channel growth has enabled the UK ad market to narrowly avoid contraction after close to £9 billion was spent across Q2, with four in five advertising pounds now spent online.
The Advertising Association and WARC’s latest Expenditure Report indicates that the UK ad market registered a marginal growth of 1% across the second quarter, in line with forecasts of 0.9%.
Key online formats such as such as search and online display registered growth of 5.3% and 5.8% between April and June respectively, whilst broadcaster video-on-demand (5.6%) and out-of-home (4.4%) also continued to grow.
“Advertising continues to show itself as a weathervane for the UK economy, with the advertising market expected to grow slightly more than the economy, with both barely in positive figures,” said Advertising Association CEO, Stephen Woodford.
“Looking ahead to 2024, we expect to see more channels experience growth again, as the ad market grows to £37bn for the year.”
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He continued: “As we anticipate the general election next year, the Advertising Association will continue to demonstrate advertising’s contribution to a strong economy, not least that brands that continue to invest in advertising during a downturn are more likely to post better returns when emerging from tough conditions.”
The UK ad market growth was equivalent to £17.5 billion in spend from January to June 2023, in comparison to £17.3 billion the previous year.
WARC director of data, intelligence and forecasting, James McDonald, added: “The UK’s economy continues to skirt with recession as households make cutbacks in the face of stubbornly high inflation and unemployment slowly ticks upwards as activity in the private sector cools.
“It is therefore encouraging that, amid this backdrop, the UK’s advertising industry was able to grow during the first six months of 2023, and that the market is on course to be 2.6% larger this year overall.
“It should however be noted that this growth is concentrated in certain corners of the industry, with broadcasters and publishers bearing the brunt of an unfavourable trading climate while digitally native platforms largely prosper.”
