Sharp recovery expected in UK ad-spend

bee-advertAdvertising spending in UK media is expected to show a seven per cent increase this year, double the rate GroupM predicted only six months ago and leading the world’s developed economies.

The report, released by GroupM Futures Director Adam Smith, measured ad spending in the UK will reach a total of £13.9 billion ($22.5 billion, €16.3bn) in 2013, up from £13 billion in 2012 and eclipsing the previous peak of £13.1 billion in 2007.

The study also predicted that UK ad spending in 2014 will increase 6 per cent to £14.8 billion.

“This ad recovery is spectacular, but not a phenomenon,” Smith said in releasing the report.  “UK annual GDP is likely to have risen 9 per cent in cash terms since 2008, and annual advertising the same. The question is whether advertisers sustain their optimism that UK households are feeling richer, and might actually get richer, between now and the election expected in spring 2015.”

According to the report, digital spending including paid search will reach £6.1 billion in 2013, a 17 per cent increase from 2012. The figure represents an increase in digital’s share of measured ad investment to 44 per cent in 2013, from 40 per cent in 2012.

Smith added: “UK paid search has doubled in size since 2008 in cash terms and as a share of all UK marketing investment. Smartphones, tablets and e-commerce sustain this momentum. We think mobile (including tablets) will furnish 70 per cent of paid search investment growth this year and all of it next year.”

GroupM expects digital display advertising to grow 17 per cent in 2013, with continued demand for video and social inventory in particular. Automated or “programmatic” buying of digital display inventory is now routine for many advertisers, and their rising appetite will be a theme for 2014.

TV advertising is predicted to grow 6.8 per cent in 2013, in line with the accelerated market average.

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