UK adspend has grown for the 20th consecutive quarter, marking the strongest first-half performance since 2014, according to the Advertising Association/Warc Expenditure Report.
James McDonald, data editor at Warc admitted the results had “exceeded expectations”. This was despite market uncertainty around the economy following Brexit.
The report upgraded UK adspend projections to 6.3% in 2018 and 4.9% in 2019. McDonald said: “Barring any major shock to the system, this trend should continue to play out over the years ahead, lifting total market value in tow.”
Building upon the first quarter, in the second quarter (up 6.4%), £5.6bn was spent. In the first half, £11.4bn was registered. The study projects 2018 accumulating £23.5bn.
Online advertising was the dominant major driver, this spend includes including newsbrands, magazine brands, broadcaster video-on-demand and radio station websites. This sector saw 13.3% growth in 2018, generating spend of £13bn. Mobile internet spend was up by 27.9%, slower than the 37.3% the prior year. This slowdown is expected to continue into 2019 with 19.5% growth.
Mobile accounted for over half of search spend for the first time in the second quarter. The TV market also experience growth in the second quarter, growing ahead of expectations in the second quarter of 2018, with total spend rising 1.9% to £1.2bn.
Stephen Woodford, chief executive at the AA, said: “Spend on advertising is showing real strength and resilience especially at a time of some uncertainty for UK business. We know advertising has a positive effect on the economy, with £1 spent generating £6 for UK GDP, so it is encouraging to see the strongest Q2 and H1 results since 2014.
“While we welcome these figures, we are also conscious that our upgraded predictions for 2018 and 2019 depend on getting the right deal from Brexit negotiations and clarity on what the future will look like.
“We must also ensure that the unique features that have made the UK the global hub for our industry, such as access to the best and brightest creative talent from across the world, are prioritised as we leave the EU.”
Direct mail is facing a 4.5% decline. The print industry is also losing spend - national newsbrands will drop 4.3%, regionals 8%, and magazines 6.8%. The newsbrands are exhibiting digital growth but magazines are slumping in this space too at a 1.1% decline.
The study has been tracking adspend for the last 35 years.