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UK advertising set for record-breaking 2021 growth

UK ad spend is expected to grow by almost 25% this year to reach a total of £29.3 billion, as the industry begins to show the full force of its recovery after last year’s pandemic-related struggles, according to the latest Advertising Association/WARC Expenditure Report.

In growing 24.8% this year, the UK ad market will make its largest annual rise in spend since records began. Within this, the biggest growth percentage will be seen in cinema (88%), search (30.1%), out-of-home (27.6%), and online display (25.4%). And it will be driven in the fourth quarter of 2021 by an expected spend of £7.9 billion – also the highest level ever recorded for the Christmas advertising season.

Spending over this year’s Christmas period will increase by almost £1 billion (£929 million), as online shopping habits drive a 15.3% growth in search spend for the quarter. Meanwhile, broadcaster video-on-demand will be up 24.1% and TV is on course for its largest Q4 increase in over a decade (9%).

“The latest data demonstrate bullish trade in the UK’s advertising sector despite potential inflationary headwinds and supply chain disruption in the run up to Christmas,” said James McDonald, Head of Data Content at WARC. “Strong fourth quarter projections for TV – a medium heavily leveraged by retailers during the golden quarter – and search, which encompasses activity on eCommerce platforms, suggest it will be largely business as usual for the industry this year.”

The impressive growth is forecast to continue into 2022, with spend across the year expected to hit £31.5 billion thanks to a 7.7% year-on-year increase. Cinema (123.2%) and out-of-home (27.7%) look set to show big movement for a second year running.

All-in-all, the UK remains on course to achieve the fastest ad trade recovery amongst Europe’s major markets.

“UK advertising’s recovery goes from strength-to-strength, following the sharp shock of the pandemic. Ad spend is set to grow by 24.8% to a record £29.3 billion, proving advertising’s role as a vital engine for growth in the UK economy, particularly during the upcoming Christmas period,” said Stephen Woodford, Chief Executive at Advertising Association. “The forecast of strong online performance is further evidence of the UK’s position as the world’s most digitally advanced advertising market and Europe’s biggest.”

The latest report also features the actual figures for Q2 2021, showing that spend rose 86.5% to reach £7.7 billion. This recovery was led by increases in out-of-home (+276.8%), digital magazine brands (+155.5%), and direct mail (+104.0%), as the UK began to emerge from its third lockdown.

Here’s what industry executives had to say about the latest report.

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