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UK advertising expenditure growth of 3.2% forecast for 2017 – seventh consecutive year

1 Feb 2017

The Advertising Association/Warc Expenditure Report, published 31 January 2017, forecasts a UK advertising expenditure growth of 3.2% for 2017 based on the spend data for Q3 2016, the first full quarter after the Brexit vote.

Adspend rose 4.2% year-on-year in Q3 2016 to £5,142m, the first third quarter to break the £5bn spend barrier. This was driven by strong growth in internet spend (15.3%), which in turn was boosted by 45.6% growth in mobile spend. Digital out of home spend (+24.7%) also performed strongly and TV spend increased 1.4% from a record-high Q3 in 2015, when the UK hosted the Rugby World Cup.

Stephen Woodford

The full year 2016 adspend estimate is 4.4% growth - a total of £21.1bn and £886m more than in 2015. This is the seventh consecutive year of growth in the UK's advertising market.

Stephen Woodford, chief executive at the Advertising Association said, “That adspend held up after the referendum is another marker of the strength of the UK's advertising and media industries. As the government gears up for Brexit negotiations and a new industrial strategy, it must prioritise protecting this global advantage.”

James McDonald, senior data analyst at Warc commented, “Drawing from over three decades of unique and extensive industry data, we know that the amount spent to reach consumers has never been greater. Advertising on social platforms, particularly via mobile devices as native articles and videos, will continue to garner surging investment this year as marketers shadow media consumption habits. Yet the TV spot, an industry staple, will remain the largest ad format by spend in 2017.”

The Advertising Association/Warc Expenditure Report is the definitive measure of advertising activity in the UK. It is the only source that uses advertising expenditure, gathered from across the entire media landscape, rather than relying solely on estimated or modelled data. With total market and individual media data available quarterly from 1982, it is the most reliable picture of the industry and is widely used by advertisers, agencies, media owners and analysts.

UK advertising expenditure, 2015-2017

	Adspend 2015 (£m)	2015 vs 2014	2016 (Estimate)		Forecast 2017
		% change	Adspend (£m)	y/y % change	y/y % change
TV	5,270	7.30%	5,353	1.60%	1.60%
of which spot advertising	4,760	6.70%	4,790	0.60%	0.70%
of which broadcaster VOD	175	20.70%	202	15.40%	12.40%
Radio	613	6.50%	637	3.90%	2.10%
of which digital ad formats	20	-	27	31.40%	20.00%
Out of home	1,059	3.90%	1,111	5.00%	2.20%
National newsbrands	1,223	-10.80%	1,102	-9.80%	-7.90%
of which digital	220	2.50%	224	2.10%	2.20%
Regional newsbrands	1,176	-6.20%	1,036	-11.90%	-8.60%
of which digital	199	14.80%	196	-1.70%	3.80%
Magazine brands	941	-5.20%	885	-6.00%	-5.10%
of which digital	282	5.80%	289	2.60%	3.60%
Cinema	240	21.90%	262	9.20%	2.40%
Internet	8,702	18.60%	9,957	14.40%	9.50%
of which mobile	2,622	60.80%	3,826	45.90%	26.00%
Direct mail	1,912	1.40%	1,714	-10.40%	-7.80%
TOTAL UK ADSPEND	20,260	8.10%	21,145	4.40%	3.20%

Media summary Q3 2016

• Radio adspend - incorporating spots, branded content and digital ad formats - rose by 5.6% in Q3 2016, reaching £157m. It is estimated to have grown 3.9% in 2016, with growth of 2.1% forecast this year.

• Out of home (OOH) adspend grew 3.1% in Q3 2016 to reach £279m. This was driven by digital OOH growth of 24.7%. Total OOH adspend is estimated to have grown 5.0% in 2016, with growth of 2.2% forecast for 2017.

• National newsbrands adspend declined by 9.0% year-on-year in Q3 to a total of £258m, however ad revenue from digital formats increased 4.7% to £59m. Total ad revenue for national newsbrands is estimated to have contracted by 9.8% in 2016 (though income from digital ads grew 2.1%) and a slower decline of 7.9% is forecast for 2017.

• Regional newsbrands' ad income decreased by 14.7% in Q3 2016 to a total of £250m. Collective advertising revenues from both digital (-1.5%) and print (-17.5%) properties dipped during the quarter. Total regional newsbrand adspend is estimated to have declined by 11.9% in 2016 (with digital spend down 1.7%), though a softer fall - of 8.6% - is forecast for 2017.

• Magazine brands adspend declined 9.5% in Q3 2016 to a total of £224m, however, digital ad revenue increased 0.8%. Total ad revenue for magazine publishers is estimated to have fallen 6.0% in 2016 (despite 2.6% digital growth), easing to a forecast 5.1% decline for 2017.

• Cinema adspend increased 17.1% year-on-year in Q3 2016 to a total of £65m. Spend for 2016 as a whole is estimated to have increased 9.2%, with growth of 2.4% forecast for 2017.

• Internet adspend grew by an estimated 15.3% year-on-year in Q3 2016 to a total of £2,518m, driven by mobile adspend growth of 45.6% (to £994 million). Total internet adspend in 2016 is estimated to have risen by 14.4% (with mobile spend up 45.9%). Further growth, of 9.5%, is forecast for 2017, by when internet will account for over half of all UK adspend.