UK’s advertising market was up 1.0% during the second quarter of 2023, reaching a total of almost £9bn, according to the latest Advertising Association/WARC Expenditure Report.
Online formats continue to experience the most growth, with search up 5.3% and online display up 5.8% between April and June. BVOD (+5.6%) and out of home (+4.4%) also continued their recovery following the pandemic downturn.
The advertising industry is often seen as a barometer for the broader state of the UK economy, and AA/WARC’s latest results demonstrate this trend. 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.’
In the first half of 2023, the UK advertising market recorded a 1.0% year-on-year increase, equivalent to £17.5bn in spend from January to June 2023, compared to £17.3bn the previous year.
Similarly to Q1 2023, some of the sharpest falls were registered within publishing once again, though TV also saw steep overall declines despite growth in online formats.
Forecasts for the future
Looking ahead to forecasts for the full year, AA/WARC expects ad spend to grow 2.6% to reach £35.6bn in 2023. Double-digit growth is expected from BVOD at 16.1% year-on-year, with increases also projected for online display (7.4%), out of home (7.7%) and cinema (7.6%).
Woodford added: ‘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.‘
Key content moments, such as the FIFA Women’s World Cup, Rugby World Cup, the return of Big Brother to ITV and the success of the Barbie and Oppenheimer films, are expected to contribute to ad spend growth in the second half of 2023.
James McDonald, Director of Data, Intelligence & Forecasting, WARC, said that despite households making cutbacks in spending due to high inflation, the ability for the advertising industry to grow is encouraging.
‘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,’ he said.
Featured image: Advertising Association/WARC Expenditure Report.