UK ad spend is predicted to fall by 15.6 per cent to £21.4bn this year, as the coronavirus outbreak continues to have an impact on advertising and the UK economy as a whole. The latest forecasts from the Advertising Association and Warc are actually a slight improvement on the 16.7 per cent decline predicted in April.

The improved forecast has been linked to the estimated impact of recent measures announced by the government to stimulate consumer spending. However, with unemployment levels expected to remain high into next year and the possibility of a second Covid-19 wave, year-on-year growth is not expected until Q2 2021.

On the assumption a successful vaccine is in place, 2021 ad spend is predicted to be 16.6 per cent higher than 2020 – but it will still fall short of 2019 levels.

“It is vital that our industry continues to do all it can to support the recovery, most pertinently by joining the ‘Enjoy Summer Safely’ coalition to help mainstream essential public health messages,” said Keith Weed, Advertising Association President. “It has been incredibly impressive to see how our industry has so quickly rallied together to carry public health campaigns and other initiatives to inform and assist people across the country.”    

In the first quarter of 2020, total UK ad spend was up 2.9 per cent YoY, when the full force of the Covid-19 pandemic hadn’t yet made its mark. For the second quarter, by contrast, a YoY decline of 39 per cent is expected.

Search and online display grew by 10.1 and 11.8 per cent respectively in Q1 2020, with video on demand recording 11.3 per cent growth and online national newsbrands seeing a rise of 14.2 per cent. However, these strong digital showings are expected to fade significantly in Q2 2020, where we can expect to see declines of 100 per cent for cinema and 70.4 per cent for out-of-home (OOH). At the same time, digital OOH can expect a rebound of 38.7 per cent in 2021, with cinema experiencing the highest increase of all formats at 79.6 per cent.

“First quarter metrics were softer than had been anticipated going into lockdown, but we believe the second quarter will represent the nadir. With unemployment expected to remain well above pre-pandemic levels into next year, and the possibility of a second virus wave during the winter, no growth in total adspend is forecast until Q2 2021,” said James McDonald, Head of Data Content at Warc.

“Our cautious optimism that investment will rebound from April 2021 is rooted, in part, in a belief that a ‘new normal’ will then have been established, borne by a successful vaccination programme. Under these circumstances, we feel the UK’s ad industry can attain a full recovery during 2021 as a whole, though total market value will still be down on 2019’s peak.”