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Forecast: UK ad market to grow 9.2% in 2022

October 27, 2022

The UK’s advertising market will grow to reach £35 billion (€40.3bn) by the end of this year, according to the latest Advertising Association/WARC Expenditure report, based on direct data from UK media owners across the entire landscape.

Although the 9.2 per cent growth rate is strong, it constitutes a downgrade of 1.7 percentage points from July’s forecast of 10.9 per cent reaching £35.4 billion by year end. This is a result of inflation squeezing both companies’ input costs and customer wallets.

“Higher costs are carving into advertisers’ margins and household budgets alike, and trading conditions are at their worst since the Covid outbreak,” commented James McDonald, Director of Data, Intelligence & Forecasting at WARC. It’s leading to “muted expectations.”

It’s set to be a busy final quarter of 2022 as the Qatar World Cup leads into the vital Christmas season.

Despite the sporting event, linear TV is expected to remain flat at £1.7 billion, while VoD is set to grow ahead of the broader market at 4.2 per cent.

Ad-spend is expected to rise, but not by a lot, even though a 4.5 per cent year-on-year increase will, again, break a new record to take Q4 adspend to £9.5 billion.

Search advertising is expected to see a lift from e-commerce’s renewed importance to Christmas shopping, growing 7.3 per cent to reach £3.4 billion.

2023 forecasts: slowing growth and online dominance

The market is expected to grow but at a slower rate of 3.9 per cent, to reach a total of £36.2 billion in 2023.

Online adspend in 2023 is expected to just cross the three-quarter threshold to reach 75.2 per cent.

Deep dive on Q2

For Q2, advertising spend grew by 8.8 per cent, contributing to a first half ad market growth of 14.4 per cent to reach £16.7 billion.

Certain channels experienced very strong growth over the quarter:

  • OOH +46.4 per cent
  • Cinema +2,208 per cent
  • Broadcaster video-on-demand +9.3 per cent
  • National newsbrands +9.1 per cent

TV, meanwhile, was the only medium that saw a decline in investment with a drop of 0.6 per cent.

Categories: Advertising, Articles, Markets, Research

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