Report: 2021 strongest year ever for UK ad market
January 27, 2022
The latest Advertising Association/WARC Expenditure Report has outlined an even greater recovery for the UK’s advertising market than previously expected, with revised estimates for growth in 2021 standing at 26.4 per cent to reach a total of £29.7 billion (€35.6bn).
The findings upgrade October’s projection for 2021 (+24.8 per cent) by 1.6 percentage points, equating to the strongest year in UK ad market history. This is supported by the actual data released for Q3 2021, showing adspend of £7.3 billion – the largest-ever summer spend on record.
New forecasts also show total investment for 2022 is set to rise by 8.5 per cent to £32.2 billion – meaning the UK market will have expanded by more than a third since 2020. A bright start to the year contributes to an upgrade of almost one percentage point for 2022 growth, while sectors especially hit by the Covid-19 pandemic – such as cinema and out-of-home – will expect to see a continued recovery.
In addition, these recovery projections are supported by international data from WARC which expects the UK’s bounce-back in 2021 to be the largest across any major international ad market – including the US, France and China – while outstripping the global rate by more than 12 percentage points.
Best-ever summer confirmed in 2021
Actual figures released by AA/WARC confirm adspend rose 23.2 per cent during Q3 2021 to a record £7.3 billion – three percentage points and £183 million ahead of forecast. All media recorded double-digit growth in Q3 2021 following the previous year’s decline, as the summer period saw the return of key sporting moments such as the Euros, Olympics and Paralympics along with the easing of Covid-19 restrictions.
Triple-digit growth was confirmed for cinema (+655.9 per cent) to £20.2m, marked by the September release of James Bond’s No Time to Die, while out-of-home saw an increase of 62.6 per cent to £270.4 million. Regional newsbrands saw online ad revenue overtake print for the second quarter running, as online revenue grew to £67.5 million (+55.7 per cent) with combined investment of £132.7 million (+22.4 per cent).
2022 market will have grown by more than a third since 2020
UK adspend is expected to continue to rise to £32.2 billion this year as current projections anticipate 8.5 per cent growth, including strong recoveries for cinema (+201.1 per cent) and out-of-home (+26.8 per cent). Continued growth is also expected from the largest advertising channels, including search (+11.1 per cent), online display (+8.3 per cent) and TV (+5.3 per cent) as consumer habits gained during the pandemic are expected to be retained.
The latest figures suggest Q1 2022 also looks to be stronger than expected (particularly within TV) and overall adspend is now forecast to grow 12.6 per cent year-on-year, compared with 10.5 per cent previously.
Stephen Woodford, Chief Executive, Advertising Association said: “UK advertising has seen a remarkable recovery from the coronavirus pandemic, racing ahead of key international markets with spend expected to cross the threshold of £30 billion this year. A strong advertising market is a key indicator of the UK economy’s growth, with every £1 spent on advertising generating £6 GDP. The latest AA/WARC report brings welcome news not just for our industry but for the wider economy, as advertising investment is a key lever for businesses to capture new markets and drive their recovery. It is all the more important therefore that the Government recognises the need to support industry-led skills training to complement the demand for digital skills required to keep this market booming.”
James McDonald, Director of Data, Intelligence & Forecasting, WARC said: “The latest verified data support our previous estimation that 2021 was the strongest year for the UK’s advertising market since monitoring began. Encouragingly this momentum appears to have sustained into the new year, with the impact of the Omicron variant on advertising trade appearing to be reasonably muted across the majority of sectors. While inflation is set to act as a headwind on both the consumer and media buyers alike in the coming months, we have little reason to believe that the UK’s ad market won’t achieve growth of 8.5 per cent this year – well ahead of the average recorded during the decade preceding.”