WARC and the Advertising Association have upped their projection for ad spend in 2024 to a 5.9% increase to £39 billion, after stronger than expected growth in the third quarter of 2023.
UK advertising spend rose by 15.9% to a total of £9.6 billion across July to September driven by an upsurge in online advertising.
It is now thought that the UK advertising market grew by 6.4% in 2023 to a total of £37 billion, with the final figures set to be released at the end of the financial year in April.
Advertising Association CEO Stephen Woodford said: “The Q3 increase in 2023 and 2024 forecast upgrade demonstrate advertisers’ continued commitment to investing in their brands, despite the lack of overall growth and stubborn inflationary pressures in the UK economy.
The IPA’s latest Bellwether forecast upgrade is further evidence of this, with the strongest improvement in advertiser expectations on total marketing budgets since 2014.”
Woodford added that the advertising industry is forecast to perform better than the wider UK economy.
“All this should provide confidence that the industry is well positioned to help the UK’s economy tackle the economic and social challenges it faces, by promoting product and service innovation, stimulating competition and supporting jobs,” he added.
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Last week’s IPA Bellwether showed that ad spend exceeded expections in the third quarter of 2023, driven by the success of search (including retail media) and online display (including social media).
Search registered its strongest increase in 18 months, rising by 23.7% and online display spend surged 24.8%.
WARC director of data, intelligence and forecasting, James McDonald added: “With the UK’s economy in the doldrums, the online ad sector’s strongest performance in over 18 months – growing five times faster than in key European markets – came as a welcome respite for an ad industry worth a record £37 billion overall last year.
“Data shows that online retailers more than doubled their online advertising spend during the third quarter, as pricing became competitive and brand salience paramount when attracting stretched household budgets. Our expectations for 2024 are now brighter on the tailwind of a strong end to last year and positive sentiment across the marketing and wider business sectors.”
Looking ahead to 2024, WARC predicts a continued increase in ad spend across a variety of channels, with events such as Euro 2024, the Paris Olympics and a potential general election contributing positively to this trend.
