Programmatic Lunch

UK Q1 ad spend grows to £6bn driven by strength of online radio

Tyrone Stewart

Radio studio microphoneUK ad spend has continued to grow in the face of continued uncertainty over whether the UK drops out of the European Union without a deal, with online radio leading the charge. However, this uncertainty has caused growth to slow.

The UK market grew by 4.2 per cent year-on-year (YoY) in the first quarter of 2019 to reach £6bn, according to the latest figures from the Advertising Association and Warc. Despite this being the 23rd consecutive period of growth, it also represented a slow in growth from the 5.9 per cent seen for the same period last year, while also down on the 6.3 per cent seen in Q4 2019.

The report predicts that ad spend will reach £24.6bn for the year as a whole, which represents an increase of 4.6 per cent over 2018 but is below the year’s 6.2 per cent growth. In 2020, the market is expected to grow by another 5.3 per cent.

Much of the strongest growth was seen in online advertising – where online radio’s 26.5 per cent YoY growth stood out. TV video on demand grew by 17.5 per cent, while online display jumped 16.6 per cent, digital out of home experienced 10.9 per cent growth, and search was up 10.6 per cent.

Looking at ‘traditional’ formats, cinema experienced growth of 12.3 per cent and outdoor increased by 6.8 per cent. Investment TV dropped 2.5 per cent, with national news brands, magazine brands, direct mail, and traditional radio also all declining.

What the industry has to say…

David Walsh, chief business officer at Mindshare UK
“It’s fantastic to see that ad spend in the UK is on a growth trajectory, with the report forecasting an upward rise of 5.3 per cent in 2020. As traditional formats expand their digital capacity, it’s not surprising that online expenditure has achieved higher growth across the board. 

“Interestingly, search is highlighted as a key area – predicted to rise by 9.9 per cent in 2020. Our Mindshare Future of Search report revealed that search is becoming increasingly sophisticated, particularly with the rise of smart speaker adoption and image recognition technologies. 

“As expenditure in this area is predicted to grow, the search landscape will become more diverse. Marketers will therefore need to think about a cohesive, cross-platform search strategy as part of their communication plans, that reflects the nuances of key search platforms for brands across different stages of the consumer journey.”

Sam Taverner, Merkle EMEA EVP
“It’s encouraging to see that the UK’s ad market continues to grow, with positive figures reported across both traditional and online formats. With the report revealing increased spend on search / SEO and online display, it’s clear that marketers are rightly investing in maximising performance and media efficiency to deliver the right message at the right time in the consumer’s journey on path-to-purchase.

“Personalisation remains the key to driving engagement. As organisations find new ways of leveraging their data and analytical assets across all channels, brands are becoming more savvy about how and where to deploy marketing spend. This should be a crucial priority for businesses as today’s economic and political uncertainties continue to remain at large, despite the ad industry’s forecasted growth.”

John Davidson, chief operating officer at Kinetic
“Out-of-home (OOH) continues to show its real-world strength once again, proving itself to be a key growth channel in the UK advertising industry. Not only has traditional OOH been predicted further growth in 2020, digital OOH (DOOH) stands out with a forecasted 10.8 per cent growth for the following year, the second highest advertising format behind online radio.

“New brands that might not traditionally invested in the medium are now keen to invest in DOOH, and with the format continually innovating, there’s never been a better time to do so. With its amplified flexibility and dynamic creative and real-time capabilities, DOOH is now an integral part of performance marketing, delivering both long-term brand building and short-term sales activation. Its ability to work well alongside both mobile and addressable TV offers new creative opportunities, and this latest report shows that DOOH is a firm fixture alongside tried-and-true traditional OOH within the UK advertising sector.”

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