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Ad spend exceeds £10bn barrier in Q3 2024 for the first time
Advertising Association and WARC’s Expenditure Report show UK ad spend rose 9.7% to £10.6bn during the third quarter of 2024.
Georgie Moreton
Deputy Editor, BITE CreativebriefWhile the advertising industry has entered the new year with understandable caution, the latest quarterly data from the Advertising Association and WARC’s Expenditure Report gives reason to be cheerful.
The report shows that UK ad spend is set to continue to outperform the UK economy, even in real terms. The advertising market is expected to show real terms growth of 8.5% in 2024 and 4.5% in 2025.
The report uncovers real figures from the third quarter of 2024, showing that UK ad spend rose 9.7% to £10.6bn. This is the first time that ad spend has exceeded the £10bn barrier in Q3.
Online fuelled growth
The report attributes these positive figures to investment in online formats and improved performance for search. Search (including retail media) was up 12.6% to £4.6bn.
“Online ad formats, benefitting from the widespread adoption of new AI tools, have propelled the UK ad market to exceptionally strong growth so far in 2024 and will continue to drive expansion into 2025.” explains James McDonald, Director of Data, Intelligence and Forecasting at WARC.
As such, Q3 saw a 9.7% rise in UK ad spend, performing 1.4pp ahead of expectations from the previous forecast in October.
Other online formats that recorded robust growth include: Online Display, +15.2%, Online Radio, +10.0% and Broadcaster Video On-Demand, +8.7%. Live sports over the summer months such as the Olympics, Paralympics and England’s success in the Men’s Euros played a part in boosting these figures.
Direct Mail had a particularly strong quarter (+12.9%), marking a return to growth for the channel for the first time in just over two years, while Radio performed ahead of expectations at +3.8%.
Across sectors Financial (+6.9%) and Consumables (+4.0%) which includes household FMCG, cosmetics, and food and drink were two categories that spent more on media. Within Consumables, household FMCG (+21.0%) and food (+7.6%) were the key growth drivers.
Looking ahead to 2025
Looking ahead, AA/WARC anticipates ad spend growth will continue in 2025. The market is expected to grow by 6.9% to the value of £43.5bn.
As the wider economic backdrop remains uncertain, these figures paint a positive picture for the industry. Forecasts suggest ad spend is set to outperform the UK economy, even in real terms.
“While there is much work to do to kickstart growth in the UK economy, we know investment in advertising produces a fantastic return. It supports competition, innovation and jobs up and down the country, with fresh evidence for this to be previewed at the AA, IPA and ISBA’s LEAD conference next month,” added Stephen Woodford, CEO, Advertising Association.
AA/WARC Spend by category breakdown
|
Media |
Q3 2024 year-on-year % change |
YTD 2024 year-on-year % change |
FY 2024 forecast year-on-year % change | Percentage point (pp) change in forecast vs October |
FY 2025 forecast year-on-year % change |
|
Search |
12.6% | 13.1% | 12.7% | +1.7pp | 8.5% |
|
Online display* |
15.2% | 20.2% | 18.9% | +0.01pp | 9.4% |
|
TV |
-2.6% | 2.4% | 0.4% | -0.5pp | -0.1% |
|
of which BVOD |
8.7% | 14.1% | 12.4% | +0.3pp | 12.9% |
|
Out of Home |
4.4% | 12.0% | 10.3% | -1.7pp | 7.2% |
|
of which digital |
7.7% |
16.1% |
13.7% | -1.3pp | 8.1% |
|
Direct mail |
12.9% | 2.6% | 0.8% | +3.7pp | -2.8% |
|
Online classified* |
-13.5% | -16.2% | -15.6% | -0.2pp | 2.5% |
|
National newsbrands |
-5.7% | -4.7% | -4.6% | -0.6pp | -2.0% |
|
of which online |
2.1% | 1.5% | 1.6% | +0.3pp | 0.9% |
|
Radio |
3.8% | 4.6% | 4.2% | +0.3pp | 3.4% |
|
of which online |
10.0% | 5.6% | 6.6% | +0.3pp | 6.0% |
|
Magazine brands |
-16.9% | -6.8% | -6.1% | -2.4pp | -0.9% |
|
of which online |
-14.8% | -3.6% | -3.2% | -3.5pp | 1.3% |
|
Reigonal newsbrands |
-1.6% | -1.4% | -1.3% | +0.7pp | -0.7% |
|
of which online |
4.9% | 3.0% | 3.9% | +1.1pp | 1.5% |
|
Cinema |
-26.1% | -16.0% | -9.5% | -7.4pp | 4.7% |
|
TOTAL AD SPEND |
9.7% | 12.2% | 11.2% | +0.6pp | 6.9% |
|
Note: Broadcaster VOD (BVOD), digital revenues for newsbrands, magazine brands, and radio broadcasters 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.
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The quarterly Advertising Association/WARC Expenditure Report is the definitive guide to advertising expenditure in the UK, with data for all key advertising media and sub formats dating back to 1982 and forecasts spanning eight quarters ahead.
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