UK ad spend rose 9.7% to £10.6bn during the third quarter of 2024, according to the latest quarterly data from the Advertising Association and WARC’s Expenditure Report.
This marks the first time UK ad spend has exceeded the £10bn barrier in Q3. AA/WARC attributes this additional growth mainly to an improved performance for Search (including retail media) which was up 12.6% to £4.6bn.
Other online formats also recorded robust growth in Q3, including Online Display (+15.2%), Online Radio (+10.0%) and Broadcaster Video On-Demand (+8.7%) – with live sport content a key feature. Direct Mail had a particularly strong quarter (+12.9%), marking a return to growth for the channel for the first time in just over two years, and Radio performed ahead of expectations (+3.8% against expected growth of 3.0%).
The UK ad market is forecast to have grown by 11.2% overall in 2024, an upgrade of 0.6 percentage points from the October forecast, with full year spend expected to reach £40.7bn. AA/WARC largely attributes this additional growth to an improved performance for Search (including retail media) which was up 12.6% to £4.6bn.
Other online formats also recorded robust growth in Q3, including Online Display (+15.2%), Online Radio (+10.0%) and Broadcaster Video On-Demand (+8.7%) – with live sport content a key feature. Direct Mail had a particularly strong quarter (+12.9%), marking a return to growth for the channel for the first time in just over two years, and Radio performed ahead of expectations (+3.8% against expected growth of 3.0%). Final figures for full year 2024 due to be published in late April.
Looking ahead, AA/WARC anticipates additional growth of 6.9% in 2025, by when the UK’s ad market will be worth £43.5bn. Considering the wider economic backdrop, UK ad spend is set to continue to outperform the UK economy, even in real terms, with the advertising market expected to show real terms growth of 8.5% in 2024 and 4.5% in 2025.
Stephen Woodford, CEO, Advertising Association, commented: “While there is much work to do to kickstart growth in the UK economy, we know investment in advertising produces a fantastic return. It supports competition, innovation and jobs up and down the country, with fresh evidence for this to be previewed at the AA, IPA and ISBA’s LEAD conference next month. The new Ad Pays 2025 report will make a compelling case for how advertising is a vital engine of the UK economy.
“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.”
James McDonald, Director of Data, Intelligence & Forecasting, WARC, said: “Online ad formats, benefiting 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.”
