UK ad spend jumped by 9.3% to £9.2bn in the first three months of 2024, setting a new record high for a Q1 period, according to the Advertising Association and WARC’s latest expenditure report.

The latest forecasts now expect a rise of 9.2% (which is up from the previous forecast of a 6.4% rise) in Q2, with the upgrade reflecting higher spending during the Men’s Euros and the impact of the snap election.

In total, the Advertising Association and WARC have upped their predictions for the full year from a 7.7% rise, by 1.9 pp from 5.8% at the last Expenditure Report.

The sector is also expected to further reap the rewards in 2025, with an expected rise of 5.5% to reach £41.66bn (this is an upgrade of 1.0 pp from the previous forecast).

“It is welcome news to see real-term growth and upgraded forecasts in the advertising market in Q1 this year, a positive sign that our industry is one of the driving factors in the UK’s economic recovery,” said Advertising Association chief executive Stephen Woodford.

“This is a timely reminder of its dynamism as the new government seeks to create an environment for growth, through political stability and a new industrial strategy,” he added.

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What are the platforms and categories behind the rise?

Online advertising performed particularly well, with search going up by 12% and online display up by 12.8%. Meanwhile there was also a return to growth for cinema which rose by 6.4%, and a small lift for TV which was up by 1.2%.

Channels expected to continue to see a boost this year are out-of-home (+12.5%), search (+10.1%) and radio (+5.5%). Meanwhile, broadcaster video on-demand (BVOD) is expected to cross the £1bn threshold for the first time, rising by 13.1%.

The stand out categories behind the rise include consumables, including food and drink  and cosmetics (unsurprising perhaps given the summer of sport). Leisure and entertainment, media and transport also rose 8.9%.

However all other major categories posted year-on-year declines for the period.

WARC director of data intelligence and forecasting James McDonald added that “the race for AI adoption” had “intensified” and said major online platforms introducing “their own solutions” had led to an improved bottom line.”

He added that as well as the marked success of online, the “enduring strength of legacy display media – chiefly TV, out-of-home, radio and cinema was also evident in the first quarter”.

McDonald concluded that while “short term stimuli” such as the Men’s Euros and snap election were behind the uptick, the outlook for the coming year is “brighter” than its previous prediction”.

How the industry is reacting

“It’s refreshing to see the ad industry’s determination to not only monopolise on significant political and cultural events but thrive on them, as spend for the quarter ahead nears £10bn,” said Joan London managing director Tom Ghiden.

“While online advertising goes from strength to strength, a boost to OOH, radio and TV is showing the real value that traditional advertising still holds, particularly around significant events like the summer of sport and elections,” he added.

Ghiden also added that with the Olympics being “around the corner” it’s time for brands to “tighten their messaging and advertisers to push their creative boundaries”.

“Leading with authentic content and building trust with consumers is key to the future of advertising,” he summarised.

Meanwhile, general manager of business development at the Trade Desk Jessica McGrogan said “As advertisers consider the pounds behind their outstanding campaigns, they’ll ponder on how they can maximise a return on their investments. The answer lies in measurement.”

She added that the findings highlight that advertisers shouldn’t be distracted by Google’s “flip-flopping” on Privacy Sandbox.

She highlighted that there are “other identity solutions” that and “give advertisers a much deeper and comprehensive understanding of consumer behaviour to ensure they are getting the biggest bang for their buck”