The UK’s advertising market was marginally up (+1 per cent) during the second quarter of 2023 to reach a total of almost £9bn, according to the latest Advertising Association/WARC Expenditure Report.

The report reveals that key online formats, including search (+5.3 per cent) and online display (+5.8 per cent) registered growth between April and June, alongside BVOD (+5.6 per cent) and out of home (+4.4 per cent), which continued its recovery from the pandemic downturn.

The advertising industry is often seen as a barometer for the broader state of the UK economy, and AA/WARC’s latest results continue to demonstrate this trend. The industry-verified data for Q2 of 1 per cent ad spend growth is just ahead of ONS figures for the same period, which show that GDP rose 0.6 per cent.

In the first half of 2023, the UK advertising market recorded a 1 per cent year-on-year increase, equivalent to £17.5bn in spend from January to June 2023, compared to £17.3bn the previous year.

Looking ahead to forecasts for the full year, AA/WARC expects ad spend to grow 2.6 per cent to reach £35.6bn in 2023. Double-digit growth is expected from Broadcaster Video on Demand (BVOD) at 16.1 per cent year-on-year, with increases also projected for online display (7.4 per cent), out of home (7.7 per cent) and cinema (7.6 per cent). Sporting events such as the FIFA Women’s World Cup and the Rugby World Cup, as well as key content moments such as the return of ‘Big Brother’ to ITV and the success of the ‘Barbie’ and ‘Oppenheimer’ films, are expected to give ad spend a fillip in the second half of 2023 in the face of ongoing macroeconomic headwinds.

The latest dataset shows that the UK’s ad market is set to grow by 3.9 per cent to reach £37bn in 2024, a minor downgrade from July’s forecast of +4 per cent. More channels are expected to return to growth next year, such as the online portions of national and regional newsbrands and magazines, though the economic backdrop is likely to remain challenging.

“The UK’s economy continues to skirt with recession as households make cutbacks in the face of stubbornly high inflation and unemployment slowly ticks upwards as activity in the private sector cools,” said James McDonald, Director of Data, Intelligence & Forecasting at WARC. “It is therefore encouraging that, amid this backdrop, the UK’s advertising industry was able to grow during the first six months of 2023, and that the market is on course to be 2.6 per cent larger this year overall. It should however be noted that this growth is concentrated in certain corners of the industry, with broadcasters and publishers bearing the brunt of an unfavourable trading climate while digitally native platforms largely prosper.”