Waqas Qureshi looks over stats and figures of the UK’s advertising industry

UK advertising expenditure grew 3.7% to reach £21.4bn in 2016, the seventh consecutive year of market growth, according to the Advertising Association/ WARC Expenditure Report.
Growth in UK adspend held steady in Q3 after the June EU referendum, before reaching £5.8bn in Q4 2016, a rise of 3.9% year-on-year and the highest grossing quarter on record. Overall, after accounting for inflation, UK adspend topped its pre-recession peak for the first time during both the final quarter and for 2016 as a whole. Forecasts for the next two years indicate continued growth of 2.5% in 2017 and 3.3% in 2018. Digital formats continued to drive growth in 2016, with internet adspend up by 13.4% to £10.3bn, with mobile accounting for 99% of that growth. Mobile spend reached £3.9bn, with 86% of the current value of the mobile advertising market generated in just the past five years.

“TV adspend, boosted by 12.6% growth in video-on-demand
revenue, recorded a new high of £5.3bn in 2016”

Digital accounted for 38% of the £1.1bn out of home advertising market in 2016, double the share digital recorded in 2012, while revenues from online ads were up for national
newsbrands (+4.9% to GBP 230m) for the fifth year running. TV adspend, boosted by 12.6% growth in video-on-demand revenue, recorded a new high of £5.3bn in 2016, with TV’s share of overall spend holding steady at 25% over the last decade. Annual growth in adspend was also recorded for cinema (+8% to £257m) and radio (+5.4% to £646m) in 2016.

Stephen Woodford, chief executive at the Advertising Association said: “Advertising has proved resilient to uncertainty and behind these numbers is a cutting edge, digital business
in which Britain is a world-beater. As we work towards Brexit, we’re urging Government to support UK advertising and do more to unlock its potential to grow UK plc.”

“The UK’s ad industry is experiencing the most seismic
shift since WARC began monitoring in 1982”

James McDonald, senior data analyst at WARC, said: “The UK’s ad industry is experiencing the most seismic shift since WARC began monitoring in 1982. Last year exemplified this,
as over 95% of the new money entering the market came from digital formats. The trend will continue as ad tech improvesand consumers spend more time with their internet-connected devices.”
The Advertising Association/WARC Expenditure Report is the definitive measure of advertising activity in the UK.

“Total TV spend is expected to dip this year, before the losses are
regained in 2018”

It is the only source that uses advertising expenditure gathered from across the entire media landscape,rather than relying solely on estimated or modelled data. With total market and individual media data available quarterly from 1982, it is the most reliable picture of the industry and is widely used by advertisers, agencies, media owners and analysts.

At-a-glance media summary, Q4 2016

– Internet adspend rose 15.3% during Q4 2016, pushing the full-year total above GBP 10bn for the first time. Mobile accounted for 99% of the new money entering the internet
ad market last year. – Television adspend dipped 2.1% in the final quarter of 2016, though this was counter-balanced by rises earlier in the year, resulting in 0.2% growth for 2016 as a whole. Total TV spend is expected to dip this year, before the losses are regained in 2018. – Radio adspend rose 7.7% to a record-high level during the last three months of 2016, buoyed by the strongest growth in spot revenue since Q4 2014. Other than internet, radio was the only medium to gain share of total adspend in 2016 (+0.1pp vs. 2015).

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