2021 was the strongest year ever for the UK’s ad market, with growth expected to be recorded at 26.4%, according to estimations in the latest Expenditure Report from the Advertising Association and WARC.
Should the upgraded projection prove to be correct, the UK’s ad spend would have reached a total of £29.7 billion last year. The estimation is supported by actual Q3 2021 data showing that ad spend reached £7.3 billion, representing a 23.2% increase, and the largest summer spend on record.
All media recorded double-digit growth in the third quarter of 2021, with the summer of sport playing a significant role alongside the easing of pandemic-related restrictions. Cinema leaped 655.9% to £20.2 million, mostly thanks to the release of No Time to Die, while out-of-home spend was up 62.6% to £270.4 million. Elsewhere, regional newsbrands saw online ad spend overtake print for a second quarter in a row, with online revenue growing to £67.5 million, an increase of 55.7%.
“The latest verified data supports our previous estimation that 2021 was the strongest year for the UK’s advertising market since monitoring began,” said James McDonald, Director of Data, Intelligence & Forecasting at WARC. Encouragingly this momentum appears to have sustained into the new year, with the impact of the Omicron variant on advertising trade appearing to be reasonably muted across the majority of sectors.”
Forecasts for 2022 show that investment is on course to increase by a further 8.5%, reaching £32.2 billion, and meaning the market will have expanded by more than 33% since 2020. Cinema (+201.1%) and out-of-home (+26.8%) are on course to continue their strong recoveries, while search (+11.1%), online display (+8.3%), and TV (+5.3%) also make solid gains.
The report’s latest predictions also suggest that Q1 2022 could see stronger-previously-than-expected growth, with the forecast being increased from +10.5% to +12.6%.
“UK advertising has seen a remarkable recovery from the coronavirus pandemic, racing ahead of key international markets with spend expected to cross the threshold of £30 billion this year. A strong advertising market is a key indicator of the UK economy’s growth, with every £1 spent on advertising generating £6 GDP. The latest AA/WARC report brings welcome news not just for our industry but for the wider economy, as advertising investment is a key lever for businesses to capture new markets and drive their recovery,” said Stephen Woodford, Chief Executive at the Advertising Association.
“It is all the more important therefore that the Government recognises the need to support industry-led skills training to complement the demand for digital skills required to keep this market booming.”