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The Advertising Association (AA) and WARC have today published their latest Advertising Expenditure Report, outlining the key adspend figures for Q1 2017.
The key findings from the report include:
While the figures reflect certain positives within the market, they also highlight the need to focus on a number of outstanding issues, including media accountability and industry standards, that continue to impact the industry.
ISBA's Director General, Phil Smith commented:
"It is clear from the data that many important, long-term, brand advertisers are coming under increasing pressure from disruption and from weakening consumer confidence. As mobile and online video grows, it’s vital therefore that standards of measurement and accountability improve to give advertisers greater confidence in their brand-building investments.”
A full overview of the report can be found below.
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UK advertising spend starts 2017 in growth
London, 27th July 2017: UK advertising expenditure grew 1.3% year-on-year in Q1 2017 to reach £5,318m – the 15th consecutive quarter of growth but the slowest rate in almost four years, according to Advertising Association/WARC Expenditure Report data published today.
Overall market growth occurred despite a drop of -6.2% in total television advertising, its first fall since 2009. However, TV ad expenditure is forecast to recover in 2018 with 2.5% growth.
Digital formats performed well across the board, up 25.4% for national newsbrands, 8.1% for radio, 7.2% for broadcaster video-on-demand and 27.6% for out-of-home. Cinema recorded an outstanding quarter, growing 27.6% year-on-year in Q1.
Ad spend growth continues to be driven by internet (+10.1% year-on-year), which includes digital revenues for newsbrands, magazine brands, TV and radio broadcasters. Within this, spend on mobile formats (+36.2%) was particularly strong during the first quarter. One in four pounds spent on advertising in the UK now goes towards search.
Stephen Woodford, Chief Executive at the Advertising Association said:
“As business sentiment suffers, it’s no surprise to see ad-spend come under pressure – but the market overall remains resilient. Beyond these numbers, our sector is a huge source of inward investment and exports and should be a priority for Government as we focus on business beyond Brexit.”
James McDonald, Senior Data Analyst at WARC commented:
“The latest data show that large retailers – particularly supermarkets – and major food brands reined in their TV spending by 25% during the first three months of 2017, instead committing to cutting prices on the shelves as household expenditure wanes.
“Higher inflation and slow wage growth has put a squeeze on consumer spending, while business confidence has weakened following the unexpected and indecisive general election result in June. These underlying stresses have resulted in a downgrade to our full-year expectations for UK ad market growth, almost all of which will come from digital formats.”
The Advertising Association/WARC Expenditure Report is the definitive measure of advertising activity in the UK. It is the only source that uses advertising expenditure gathered from across the entire media landscape, rather than relying on estimated or modelled data.
The full year outlook for 2017 has been downgraded by -0.5pp to 2% growth, but is forecast to recover by 2018 at 2.6% growth, driven by the men’s football World Cup and a likely improvement in certainty around the terms of Brexit.
At-a-glance media summary, Q1 2017
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