Latest figures from the AA/WARC Expenditure Report show a slight improvement in the 2020 forecast, with 2021 ad spend set to be 16.6% higher
The latest Advertising Association/WARC Expenditure Report shows UK ad spend is predicted to fall 15.6% year-on-year in 2020 to £21.4bn – a slight improvement on the 16.7% drop forecast in April. This is linked to recent measures announced by the Government to increase consumer spending. New figures for Q1 2020 show total ad spend rose 2.9% year-on-year to reach £6.4bn, contrasting with the 39.0% decline estimated for Q2 when COVID-19 took hold.
Total 2021 ad spend is forecast to be 16.6% higher than 2020 – this assumes a successful vaccine will be in place and ‘new normal’ has been established. Yet total 2021 ad spend is still predicted to be lower than the 2019 figure of £25.3bn, meaning pre-COVID-19 levels of ad spend will not be seen until 2022 at the earliest.
The data shows online and digital formats performing strongly in Q1 2020, search and online display grew by 10.1% and 11.8% respectively. VOD achieved growth of 11.3% and online national news brands saw a rise of 14.2% – yet a fall is envisaged for Q2, accounting for the impact of lockdown and the pandemic. The biggest falls predicted are understandably for cinema and out of home, but both media are forecast to record some of the largest gains in 2021 (see table below).
These figures reinforce the Advertising Association’s call for a tax incentive scheme: to stimulate advertising investment, encourage advertisers and SMEs to invest in advertising as a stimulus for the wider economy.
Commenting on the report, Stephen Woodford, Chief Executive at the Advertising Association said: “Today’s figures show that the outlook for UK advertising remains fragile, which demonstrates the need for the Government to continue working with the advertising industry to boost confidence in the economy and among consumers. This can be achieved through initiatives such as our tax credits scheme for advertising, but also by ensuring we have a regulatory environment that is open and fair, to ensure businesses have the confidence to invest. This means avoiding increased rules and regulations, such as those proposed for HFSS advertising, that will weigh on the much-anticipated recovery we hope to see next year.”
Philippa Brown, Chair of the Advertising Association & CEO of PHD added:
“These figures point to light at the end of the tunnel, which will come as a welcome relief to companies and colleagues across the advertising and media industries. While the focus remains on returning our economy to growth, it is also important we keep focus on the social recovery too and what this means for our industry around such issues as climate change and building a truly inclusive workforce, areas central to the Advertising Association’s work over the coming months.”
Written by IAB, originally posted on IABUK.com