The UK advertising market grew by 1% year-on-year in the second quarter of 2023 to reach a total of almost £9 billion, according to the latest Advertising Association (AA)/WARC Expenditure Report. The market grew by the same percentage across the first half of the year as a whole, reaching £17.5 billion in spend from January to June 2023.
During Q2 2023, four in five advertising pounds were spent online, where search (+5.3%), online display (+5.8%), broadcaster video on demand (BVOD) (+5.6%), and digital out-of-home (+5.6%) all registered noteworthy growth. Meanwhile, out-of-home as a whole grew by 4.4%.
Elsewhere, all other advertising types suffered reductions in spend, such as TV (-12.8%), national newsbrands (-9.9%), radio (-6.2%), and cinema (-7%).
Outlook
Looking ahead, AA/WARC expects ad spend to grow 2.6% across the whole of 2023, reaching £35.6 billion. Increases are expected for BVOD (16.1%), online display (7.4%), out of home (7.7%), and cinema (7.6%), with the second half of the year given a boost by the FIFA Women’s World Cup, Rugby World Cup, the return of Big Brother, and the successes of Barbie and Oppenheimer.
The forecast for 2024 is that the ad market will grow by a further 3.9% to reach £37 billion.
Stephen Woodford, CEO, Advertising Association, said: “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. Looking ahead to 2024, we expect to see more channels experience growth again, as the ad market grows to £37bn for the year. 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.”
James McDonald, Director of Data, Intelligence & Forecasting, WARC, said: “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.”
