Nigel Wilson, managing director of Hitwise writes …
With this week’s Advertising Association and Warc expenditure report increasing its 2016 growth forecast to 5.2%, despite economic impact such as Brexit, we can clearly see continued industry growth and marketers acknowledgment of media consumption today. With ad spend reaching a record £9.9bn in the first half of 2016, it is now more important than ever for marketers to create ads with value for their target audiences.
The fact is, consumers don’t dislike all adds. They tend to ignore the ones that are irrelevant and obstructive to their digital experience – and far too many ads today meet one or both of those criteria’s. Today’s wealth of data and insights means this isn’t acceptable anymore, marketers should be serving ads that are contextually relevant, useful and engaging to the consumer.”
The UK’s authoritative advertising statistics, released by the Advertising Association/Warc, show that UK advertising expenditure posted 5.2% growth in H1 2016 despite economic uncertainty before the EU referendum. The growth rate was 0.4 percentage points ahead of forecast, with adspend reaching a record £9,999m in total for the first six months of the year.
Growth in internet adspend was particularly strong, increasing 16.9% to reach £4,777m in H1. Within this category, mobile spend grew 52.6% to £1,723m – and for the first time mobile now accounts for over half of all online display adspend in the UK.
#Advertising Association & WARC upgrade UK #media spend forecast by 0.1% due to delayed #Brexit impact #marketing https://t.co/ybRTSI5LXf
— TheLighthouseCompany (@ShippingReport) October 25, 2016
Digital formats continue to thrive across all media, with online video adspend increasing by 66.4%, to £252m, while native advertising spend also grew 29.9% to £451m in H1. Digital out of home increased 28.9% in H1 to reach £176m, taking out of home’s total spend to £511m.
In light of the data, full year growth forecasts for 2016 have been revised up 1.0pp to 5.2%. However the forecast for 2017 has been downgraded by half a point to 3.3%, as the impacts of the EU referendum result begin to unfold.
Tim Lefroy, Chief Executive at the Advertising Association said:
“Investment in UK advertising remains strong this year, and the trend towards digital and mobile continues – but the medium term is more complex. The Government should avoid any regulatory uncertainty that might affect advertising’s stimulus to the economy.”
The Advertising Association/Warc Expenditure Report is the definitive measure of advertising activity in the UK. 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.
| 2015 vs 2014 | Forecast 2016 | Forecast 2017 | |||||
| Adspend 2015 (£m) | % change | Adspend (£m) | %/PP change | %/PP change | |||
| TV | 5,270 | 7.30% | 5,399 | 2.40% | (-1.2pp) | 2.60% | (-0.5pp) |
| of which spot advertising | 4,760 | 6.70% | 4,831 | 1.50% | (-1.2pp) | 1.60% | (-0.7pp) |
| of which broadcaster VOD | 175 | 20.70% | 205 | 17.10% | (0.0pp) | 17.10% | (+2.5pp) |
| Radio | 592 | 2.90% | 602 | 1.60% | (-1.3pp) | 0.80% | (-0.9pp) |
| Out of home | 1,059 | 3.90% | 1,109 | 4.80% | (+0.8pp) | 2.40% | (+0.3pp) |
| National newsbrands | 1,222 | -10.80% | 1,109 | -9.30% | (+0.8pp) | -10.40% | (+0.4pp) |
| of which digital | 220 | 2.50% | 222 | 1.00% | (-0.1pp) | 0.70% | (-0.7pp) |
| Regional newsbrands | 1,176 | -6.20% | 1,059 | -10.00% | (-0.3pp) | -8.40% | (+0.1pp) |
| of which digital | 199 | 14.80% | 202 | 1.30% | (-4.7pp) | 5.40% | (-1.5pp) |
| Magazine brands | 941 | -5.20% | 901 | -4.30% | (+1.6pp) | -5.50% | (+1.5pp) |
| of which digital | 282 | 5.80% | 292 | 3.60% | (+1.6pp) | 3.40% | (+3.6pp) |
| Cinema | 240 | 21.90% | 248 | 3.50% | (+2.2pp) | 2.60% | (+0.2pp) |
| Internet | 8,606 | 17.30% | 9,957 | 15.70% | (+3.4pp) | 9.50% | (-0.6pp) |
| of which mobile | 2,627 | 61.10% | 3,826 | 45.60% | (+6.3pp) | 26.00% | (+2.6pp) |
| Direct mail | 1,841 | 0.30% | 1,645 | -10.60% | (-3.4pp) | -7.30% | (-2.3pp) |
| TOTAL UK ADSPEND | 20,071 | 7.40% | 21,109 | 5.20% | (+1.0pp) | 3.30% | (-0.5pp) |
| Broadcaster VOD, digital revenues for newsbrands and magazine brands, radio station websites and mobile advertising spend are also included within the internet total of £8,606m, so care should be taken to avoid double counting. Radio includes branded content. From Q1 2015, the IAB has included spend for outstream/in-read video for the first time. This amounted to approximately £148m in 2015. | |||||||
| Percentage point change since August shown in brackets.
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| Source: AA/Warc Expenditure Report, October 2016. | |||||||