UK advertising growth is slowing according to the latest Advertising Association/WARC Expenditure Report, but is set to reach £34.9bn for the whole year, a slight reduction on previous forecasts.
AA/WARC is forecasting 3.9% growth in 2023, a reduction of 0.5% from previous forecasts but still pretty optimistic given the UK economy’s recent travails.
As ever, digital is the driver with online’s share of total adspend is set to grow to 74.0% for 2022 and 75.2% in 2023.
AA CEO Stephen Woodford (above) says: “It is encouraging to see strong figures in Q2, with media channels continuing their recovery from the COVID-19 pandemic. Looking forwards, political and economic stability is much-needed, given the inflationary and recessionary forces impacting all businesses. As companies navigate these pressures, we see them continuing to prioritise advertising investment to protect their brands in exceptionally challenging market conditions.”
WARC director James McDonald says: “With the economic picture worsening amid ongoing political incertitude, the likelihood of a recession is now higher than when we last assessed market prospects in the summer. Indeed, we have downgraded UK ad market growth expectations for this year and next, in large part to reflect the waning climate.
“Higher costs are carving into advertisers’ margins and household budgets alike, and trading conditions are at their worst since the Covid outbreak, leading to muted expectations for the Christmas quarter. Against this deteriorating economic backdrop, a 9.2% rise in advertising investment this year would be impressive given that it is near double the average rate of expansion recorded prior to the pandemic.”