UK adspend has risen by an impressive 9.7% year-on-year, hitting £10.6 billion in Q3 of 2024 according to the Advertising Association and WARC’s latest Expenditure Report.
The good news comes at a time of adverse economic headwinds, with the sector growing steadily despite a stubborn lack of UK economic growth.
The primary drivers of growth were online display (15.2%) and search (including retail media) at 12.6%, helping UK spend to breach the £10 billion mark for the first time in Q3.
Promisingly, direct mail returned to growth for the first time in two years (12.9%), whilst out-of-home (4.4%) and radio (3.8%) registered more modest growth. However, cinema (-26.1%), national newsbrands (-5.7%) and TV (-2.6%) suffered in the third quarter.
“While there is much work to do to kickstart growth in the UK economy, we know investment in advertising produces a fantastic return,” said AA CEO Stephen Woodford.
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“It is also important to reflect on how policy decisions can impact the planning of advertising campaigns, such as through the delayed resolution of the Less Healthy Foods regulation. This is a clear example of where businesses require certainty to have the best chance to deliver growth.”
The report forecast that adspend was set to grow by 11.2% overall across 2024, up from October’s prediction of 10.6%, rising to a total yearly spend of £40.7 billion.
The AA and WARC also upwardly revised their predictions for 2025, with the advertising market now expected to be worth £43.5 billion, up from the £43.1 billion forecast in October. This is set to be driven mainly by growth in broadcaster video-on-demand (12.9%) and online display (9.4%).
WARC director of data, intelligence and forecasting, James McDonald, added: “Online ad formats, benefitting from the widespread adoption of new AI tools, have propelled the UK ad market to exceptionally strong growth so far in 2024 and will continue to drive expansion into 2025. However, economic uncertainty remains at both a local and global level.
“As a new US president comes into office, attention will be focused on implications for the world economy. In the UK, advertising businesses will look to the UK government’s growth strategy and how it will affect the industry. A deterioration in overall business confidence could lead some marketers to depress spend in the short term.”
