UK advertising expenditure grew 1.3 per cent year-on-year in Q1 2017 to reach £5.318 billion (€5.954bn) – the 15th consecutive quarter of growth, according to Advertising Association/Warc Expenditure Report data.
Overall market growth was despite a drop of -6.2 per cent in television advertising, its steepest fall since 2009. However, TV ad expenditure is forecast to recover in 2018 with 2.5 per cent growth. Ad spend growth continues to be driven by Internet (10.1 per cent), with mobile spend (36.2 per cent) particularly strong. Cinema recorded an outstanding quarter, growing 27.6 per cent year-on-year in Q1 and outperforming forecasts by +20.0pp.
The full year outlook for 2017 has been downgraded by -0.5pp to 2 per cent, but is forecast to bounce back in 2018 at 2.6 per cent growth, driven by the Football World Cup and a likely improvement in certainty around the terms of Brexit.
“As business sentiment suffers, it’s no surprise to see ad-spend come under pressure – but the market overall remains resilient,” advised Stephen Woodford, Chief Executive at the Advertising Association. “Beyond these numbers, our sector is a huge source of inward investment and exports and should be a priority for Government as we focus on business beyond Brexit.”
“The latest data show that large retailers – particularly supermarkets – and major food brands reined in their TV spending by 25 per cent during the first three months of 2017, instead committing to cutting prices on the shelves as household expenditure wanes,” noted James McDonald, Senior Data Analyst at WARC. “Higher inflation and slow wage growth has put a squeeze on consumer spending, while business confidence has weakened following the unexpected and indecisive general election result in June. These underlying stresses have resulted in a downgrade to our full-year expectations for UK ad market growth, almost all of which will come from digital formats.”
At-a-glance media summary, Q1 2017