Site icon MediaCat

UK ad spend hits new Q3 high

UK advertising spend rose by 15.9% to a total of £9.6bn for the period July to September 2023, marking the first time that advertising spend in Q3 has exceeded the £9bn mark, according to data from the Advertising Association and WARC Expenditure Report.

Driven predominantly by a sharp increase in online advertising, advertising spend generated higher-than-expected figures in Q3 2023. The UK advertising market is now thought to have grown by 6.4% in 2023, reaching a total of £37bn for the year, representing a 3.8pp upgrade from the previous forecast.

Search marked its strongest performance in 18 months rising by 23.7% and online display followed suit with a 24.8% increase, achieving its highest gain in the same period.

Source: AA/WARC Expenditure Report, January 2024

With the projection for advertising spend upwardly revised to reach £39bn in 2024, Stephen Woodford, CEO, Advertising Association, said the 2024 forecasts indicate that the advertising industry is better placed than the wider UK economy.

‘This should provide confidence that the industry is well positioned to help the UK’s economy tackle the economic and social challenges it faces, by promoting product and service innovation, stimulating competition and supporting jobs,’ he said.

Other channels also experienced growth in Q3 2023. Cinema increased by 21.2% and out-of-home by 12.9%, while spend on broadcaster video on-demand (BVOD) increased by 28.4%, reflecting in part the role on-demand viewing played during the Women’s FIFA World Cup.  

Looking ahead

This year will see a continued increase in advertising spend across more channels, with events such as the Men’s Euros this summer, the likelihood of a General Election and residual coverage of the Olympics contributing to this trend. 

TV advertising is set to return to positive figures — up 1.4% year-on-year — mostly driven by increases in BVOD (+14.6%). The latest AA/WARC dataset also expects growth for radio (+2.1%), online channels of national newsbrands (+2.1%), regional newsbrands (+1.1%) and magazine media (+2.3%). 

James McDonald, Director of Data, Intelligence & Forecasting, WARC, said: ‘With the UK’s economy in the doldrums, the online ad sector’s strongest performance in over 18 months — growing five times faster than in key European markets — came as a welcome respite for an ad industry worth a record £37bn overall last year.

Data show that online retailers more than doubled their online advertising spend during the third quarter, as pricing became competitive and brand salience paramount when attracting stretched household budgets. Our expectations for 2024 are now brighter on the tailwind of a strong end to last year and positive sentiment across the marketing and wider business sectors.

Featured image: AA/WARC UK Expenditure report Q3 202

Exit mobile version