Enders forecasts slow down in online ad growth due to Brexit

Researcher Enders Analysis has forecast a significant slow down in UK online ad growth if there is a no-deal Brexit with display ad growth set to be hit hardest.

Just 1.2 per cent growth is expected in the display ad growth sector 2019, compared to previous growth of 17.9 per cent in 2017 and 13 per cent in 2018.

Paid search and classified to see fall in growth

Paid search will also see heavy falls in the same scenario while classified online advertising will shrink by 4 per cent, according to the analysis. Enders said earlier this year that the UK advertising industry would fall into a recession and would shrink by 3 per cent if a no-deal Brexit went ahead.

See the graph below

Source: Enders

58 per cent of the total advertising market is now spent online, which is worth nearly £13 billion a year in the UK.

Ad fraud still an issue

However, as online ad growth has been falling since 2017 in the UK, spend may not be falling completely due to Brexit. Ad fraud remains an issue for marketers as a recent Adobe study found that nearly 30 per cent of internet traffic comes from bots and other artificial sources. It is expected that more sophisticated tools will be needed to counter this risk to marketers who buy adverts online.

Despite the gloomy outlook, news publisher Daily Mail reported an increase in online ad spending due to Brexit which will give confidence to some content media publishers.

‘Google, Facebook, Amazon, professional services firms and the largest marketing cloud companies are the biggest winners, while content media, media agencies and independent advertising technology firms languish, concluded Enders in a note. ‘Self-regulation has improved as pressure mounts on advertising technology firms, but interventions by both privacy and competition authorities are now inevitable.’