AA/WARC Expenditure Report shows a 15.9% increase in spend between July and September
Despite continued economic uncertainty, following an optimistic Bellwether report showing increased marketing spend, new quarterly data from the Advertising Association and WARC gives advertisers more reasons to be hopeful.
The latest data shows that advertising spend rose by 15.9% to a total of £9.6bn for the period July to September 2023. This marks the first time that advertising spend in Q3 has exceeded the £9bn mark.
The uptick has been driven predominantly by a sharp increase in online advertising. With brands battling against turbulent economic conditions, search, online display and social media saw advertising spend reach higher-than-expected figures in Q3 2023.
A focus on conversion rates saw search experience its strongest performance in 18 months rising by 23.7%, online display followed suit with a 24.8% increase, also achieving its highest gain in the same period. Online retailers increased their online ad spend in the UK market by 156% during Q3 2023 as competition for household budgets increased.
Other areas that experienced growth in Q3 include cinema, which maintained growth post-Barbenhimer of 21.2%. Spending on broadcaster video-on-demand also increased by 28.4%, as culturally significant events such as the Women’s FIFA World Cup highlighted the importance of on-demand.
This year, strong investment in advertising is expected to continue as the Men’s Euros and Olympics will see video thrive in summer, and the likelihood of a General Election opens up opportunities.
TV advertising is set to return to positive figures – up 1.4% year-on-year – mostly driven by increases in BVOD (+14.6%). The latest AA/WARC dataset also expects a return to growth for radio (+2.1%), as well as the online channels of national newsbrands (+2.1%), regional newsbrands (+1.1%) and magazine media (+2.3%).
With final figures for the 2023 financial year due to be published in late April 2024, the UK advertising market is now thought to have grown by 6.4% in 2023, reaching a total of £37bn for the year. With strong growth set to hold strong in 2024, the projection for advertising spend this year has been upwardly revised to £39bn, equating to a year-on-year increase of 5.9%, giving marketers yet more reasons for optimism.
“Our forecasts indicate the advertising industry is performing better than the wider UK economy, with spend expected to reach £39bn in 2024. All this should provide confidence that the industry is well positioned to help the UK’s economy tackle the economic and social challenges it faces, by promoting product and service innovation, stimulating competition and supporting jobs.” added Stephen Woodford, CEO, Advertising Association.
Media |
Q3 2023 year-on-year % change |
9M 2023 year-on-year % change |
FY 2023 estimated year-on-year % change |
Percentage point (pp) change in forecast vs October |
2024 forecast year-on-year % change |
Search |
23.7% |
11.2% |
11.3% |
+5.7pp |
8.7% |
Online display* |
24.8% |
12.2% |
13.0% |
+5.6pp |
7.4% |
TV |
-3.0% |
-8.8% |
-7.3% |
-1.5pp |
1.4% |
of which VOD |
28.4% |
15.9% |
16.2% |
+0.1pp |
14.6% |
Online classified* |
12.9% |
7.7% |
8.7% |
+1.0pp |
7.3% |
Direct mail |
15.6% |
9.6% |
10.6% |
+1.3pp |
8.8% |
Out of home |
-18.0% |
-14.7% |
-13.9% |
-2.8pp |
-3.5% |
of which digital |
-13.9% |
-15.2% |
-14.3% |
-1.5pp |
-5.4% |
National newsbrands |
-2.6% |
-6.5% |
-4.8% |
+0.9pp |
-1.6% |
of which online |
-1.5% |
-5.9% |
-3.8% |
+0.6pp |
2.1% |
Radio |
-2.2% |
-4.7% |
-3.2% |
+0.2pp |
2.1% |
of which online |
-15.2% |
-5.0% |
-3.4% |
-4.7pp |
8.0% |
Regional newsbrands |
-8.2% |
-7.6% |
-6.3% |
-1.0pp |
-1.1% |
of which online |
-13.9% |
-11.5% |
-8.9% |
-3.0pp |
2.3% |
Magazine brands |
-4.8% |
-11.2% |
-9.2% |
+0.9pp |
-2.5% |
of which online |
-1.2% |
-7.6% |
-5.3% |
+1.7pp |
1.1% |
Cinema |
21.2% |
2.5% |
5.4% |
-2.2pp |
4.6% |
TOTAL AD SPEND |
15.9% |
5.8% |
6.4% |
+3.8pp |
5.9% |
Note: Broadcaster VOD, digital revenues for newsbrands, magazine brands, and radio station websites are also included within online display and classified totals, so care should be taken to avoid double counting. Online radio includes targeted in-stream radio/audio advertising sold by UK commercial radio companies, together with online S&P inventory. |
|||||
Looks like you need to create a Creativebrief account to perform this action.
Create account Sign inLooks like you need to create a Creativebrief account to perform this action.
Create account Sign in
