The rise of mobile advertising has driven a seventh consecutive year of advertising expenditure growth in the UK as TV spot buying incurs a sharp drop in demand, the latest Advertising Association/WARC Expenditure Report has found.
Advertising in the world’s second largest ad market is a leading indicator of spending trends that are likely to occur in Australia. It shows that mobile growth is strong, TV is largely flat, out of home and radio are solid, while national newsbrands continue to struggle.
“The UK’s ad industry is experiencing the most seismic shift since WARC began monitoring in 1982,” WARC senior data analyst James McDonald says.
“Last year exemplified this as over 95% of the new money entering the market came from digital formats. The trend will continue as ad tech improves and consumers spend more time with their internet-connected devices.”
Overall, UK ad spend grew 3.7% to reach £21.4 billion in 2016, driven by 45% growth in mobile, which accounted for 99% of internet advertising’s 13.4% growth to £10.3 billion.
Mobile now accounts for nearly £3.9 billion in ad spend and is forecast to grow by a further 30.4% next year. Linear TV spot buying contracted by 0.5% to £4.7 billion, which is a sharp turnaround on the 6.7% growth from 2015.
TV networks are still growing video on demand sales, with pre-rolls up 12% to £197 million, helping TV marginally grow by 0.2% to £5.2 billion overall.
Television has just begun a resurgence in Australia, following a trend in the UK that now appears to have flattened out.
National newsbrands were down 10% to £1.1 billion, overtaken by out of home advertising, which grew 4.5% to 1.1 billion (£5 million more than newsbrands). Magazine advertising contracted by 6.8% to £877 million, radio increased 5.4% to £646 million and cinema advertising increased by 8% to £257 million.
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