UK ad spend on track to recover faster than other key global markets this year
- Tuesday, January 26th, 2021
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After a turbulent 2020, the UK’s ad market is expected to grow by 15.2 per cent this year, placing its growth considerably ahead of several of the world’s other key markets, according to the latest Expenditure Report from the Advertising Association (AA) and WARC.
UK ad spend is set to reach £26.69bn in 2021, exceeding the previous high of £25.37bn recorded in 2019, with triple-digit growth expected in cinema and double-digit growth forecast across other media sectors. Due to the fact the sector was closed for most of 2020, cinema is heading toward a growth of 228.4 per cent. Meanwhile, digital out-of-home is on its way to growth of 53.6 per cent, traditional out-of-home 37.7 per cent, and video-on-demand 21.2 per cent.
All-in-all, the UK’s projected ad market growth in 2021 will put it ahead of the US (3.8 per cent), Germany (9.3 per cent), Europe minus the UK (8.8 per cent), and China (10.3 per cent).
“The outlook for the year ahead is bullish, reflecting greater certainty around Brexit and the potential for the vaccination programme to unlock economic growth. We now believe that the ad market can overcorrect in these circumstances to top its 2019 peak, though large parts of the industry remain in a fragile state,” said James McDonald, Head of Data Content at WARC.
The UK saw ad spend fall by 3.3 per cent to £5.9bn in Q3 2020, a huge improvement on the 17.9 per cent decline previously forecast, thanks to internet growth. Internet spend grew by 10.1 per cent to £4.2bn during the quarter, driven by a 14.5 per cent rise in search spend.
Across the first nine months of 2020, UK ad spend was down by 11.1 per cent at £16.2bn.
Looking at the entirety of 2020, it is believed that the UK suffered a 7.9 per cent decline in spending at an expenditure of £23.17bn, which is a big improvement on what had been previously expected. This better-than-expected performance will mean the UK’s fall has been softer than the global rate (-10.2 per cent) and the rate of the rest of Europe (-13.7 per cent).
“The latest figures from the AA/WARC Expenditure Report come as welcome news at the beginning of the year. Not only does the data show the overall decline expected in 2020 may be less than feared, but the recovery in 2021 will be stronger than we would have dared hope even a few months ago,” said Stephen Woodford, Chief Executive of the Advertising Association.
With the vaccine rollout accelerating and a Brexit trade deal in place, the 2021 business outlook is brightening, reflected by these new forecasts showing a stronger and quicker recovery in ad spend, with a stronger rebound than in other large economies. With every £1 of advertising spend generating £6 of GDP, this is good news for jobs and growth in the wider economy.”