The growth of digital marketing has helped UK ad spend beat expectations for 2016, but Brexit has led to lower forecasts in 2017, according to new figures.
The Advertising Association and Warc report said nthe growth came despite uncertainty around June’s Brexit vote, with forecasts for 2017 revised down 0.5 percentage points to 3.3 per cent growth.
The report found that in 2016 was up one percentage point from the previous estimate, to £21.1bn. By comparison, the total spend figure totalled £20.1bn in 2015.
However, Internet advertising is expected to be up 15.7 per cent to nearly £10bn in 2016 as a whole, with mobile internet advertising spend performing even better, up 45.6 per cent.
Newspapers and magazines are to be the worst performing, with spending in all of these areas shrinking this year, while TV advertising will grow 2.4 per cent – revised down 1.2 percentage points.
Within broadcast, video-on-demand advertising spend is expected to grow 17.1 per cent this year and by the same amount next year.
View the full table here:
“Investment in UK advertising remains strong this year, and the trend towards digital and mobile continues – but the medium term is more complex,” said Tim Lefroy, chief executive at the Advertising Association. “The Government should avoid any regulatory uncertainty that might affect advertising’s stimulus to the economy.”
The report also reveals that digital formats are continuing to thrive across all media, with online video adspend increasing by 66.4%, to £252m, while native advertising spend also grew 29.9% to £451m in H1.
Digital out-of-home increased 28.9% in H1 to reach £176m, taking out-of-home’s total spend to £511m.
Commenting on the results, Nigel Wilson, managing director of Hitwise, said: “With today’s Advertising Association and Warc expenditure report increasing its 2016 growth forecast to 5.2%, despite economic impact such as Brexit, we can clearly see continued industry growth and marketers acknowledgment of media consumption today. With ad spend reaching a record £9.9bn in the first half of 2016, it is now more important than ever for marketers to create ads with value for their target audiences. The fact is, consumers don’t dislike all adds. They tend to ignore the ones that are irrelevant and obstructive to their digital experience – and far too many ads today meet one or both of those criteria’s. Today’s wealth of data and insights means this isn’t acceptable anymore, marketers should be serving ads that are contextually relevant, useful and engaging to the consumer.”
Read the full report here (registration required).