The UK advertising market is poised for a stronger than expected recovery, according to the latest figures from the Advertising Association/WARC Expenditure Report.

The report outlines revised estimates for growth in 2021 now stand at 26.4% to reach a total of £29.7bn. The new findings upgrade October’s projection for 2021 (+24.8%) by 1.6%. This is supported by data released for Q3 2021 showing adspend of £7.3bn, the largest-ever summer adspend on record.

The new forecasts show that total investment for 2022 is set to rise by 8.5% to £32.2bn, meaning the UK market will have expanded by more than a third since 2020. These optimistic figures should spark hope in the minds of advertisers as sectors that were hit hard by the pandemic such as cinema and out-of-home rebuild.

According to WARC, the UK advertising bounce-back in 2021 is expected to be the largest across any major international ad market including the USA, France and China with an increase of 12% on the global recovery rate. 

“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 £30bn 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.” said Stephen Woodford, Chief Executive, Advertising Association.

A summer of growth

2021’s summer of entertainment saw major events such as the Euros, Olympics and Paralympics coincide with the easing of Covid restrictions. This led to an increase in adspend of 23.2% in Q3 with all media recording double-digit growth, adding a further £183m ahead of forecast.

Cinema in particular saw significant bounce back with major releases such as No Time To Die contributing to spend of £20.2m (+655.9%). Out-of-home also saw major increase of 62.6% to £270.4m and regional newsbrands saw online ad revenue overtake print for the second quarter running, as online revenue grew to £67.5m.  

“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,” explained James McDonald, Director of Data, Intelligence & Forecasting, WARC.

Significant market growth

UK adspend is expected to continue to rise to £32.2bn which includes continued strong recoveries for cinema (+201.1%) and out-of-home (+26.8%) and for the largest advertising channels including search (+11.1%), online display (+8.3%) and TV (+5.3%). As the world continues to navigate its way out of the pandemic, consumer habits formed during this time are expected to be retained and predicted adspend is reflective of this.

The latest figures suggest Q1 2022 looks to be stronger than expected and overall adspend is now forecast to grow 12.6% year-on-year, compared with 10.5% previously.

McDonald added; “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% this year – well ahead of the average recorded during the decade preceding the outbreak.”