London: Data released today by the Advertising Association/Warc shows UK advertising spend grew at its fastest rate for three years in Q2 2014. Growth of 8.5% year-on-year (reaching £4,515mn for the quarter) was the highest since Q3 2010.
Across the first half of 2014, total UK adspend rose by 6.3% year-on-year, leading to an upwards revision to the full year forecast to 6.4% (up 0.4pp from July’s forecast) and 6.5% for 2015 (down 0.2pp from July’s forecast).
Tim Lefroy, Chief Executive at the Advertising Association said: “Growth at twice the rate of UK GDP is quite a headline, but the real story is of digital and creative leadership in e-commerce. As the Eurozone wobbles, it’s a reminder that our consumer economy is central to the UK’s economic narrative.”
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. With total market and individual media data available quarterly from 1982, it is the most reliable picture of the industry and is widely used by advertisers, agencies, media owners and analysts.
Q2 performance was boosted by double-digit growth for TV, radio and internet and coincided with GfK’s UK Consumer Confidence Index moving back into positive territory at the end of June. Having declined for 21 of the previous 23 quarters, recruitment advertising has now registered three consecutive quarters of growth and was up 5.8% YOY for Q2 2014.
At-a-glance media summary
TV spot advertising recorded a significant rise of 10.7% YOY to £1,118m in Q2, boosted by the World Cup. Growth for the first six months stood at 8.3%, but this is expected to lessen in the second half. Overall an increase of 6.7% is predicted for 2014.
Radio (excluding branded content) rose by 17.7% to £119m in Q2, with substantial increases for the retail and industrial categories. YTD radio adspend has risen 11.5%, with overall growth of 8.3% expected in 2014. This represents the sector’s best performance since 2000.
Out of home adspend increased 6.4% to £259m in Q2 following a YOY drop of 2.2% in Q1. This takes OOH to 2.4% growth for H1 2014. AA/Warc predicts a rise of 3.4% for the year as a whole, thanks to ongoing technological advances.
National newsbrands print ad revenues declined by 5.0% in Q2 2014 to £296m, with digital adspend up 9.9%, to £48m. Altogether the sector recorded a drop of 3.1% for the quarter and 4.1% for the first half. AA/Warc predicts a decline of 2.8% for the year.
Regional newsbrands recorded a decline of 1.7% in adspend in Q2 2014 compared with last year. This represents a 5.2% drop for print (to £280m) and a 27.9% increase for digital revenues (to £44m). Forecasts have been revised up to a 5.0% drop in 2014 (+2.3pp).
Magazine brands adspend dipped 6.7% in Q2, comprising a 10.2% decline for print (to £188m) and a 5.0% uptick for digital (to £66m). Total adspend is predicted to decline 3.3% this year.
Cinema adspend saw YOY growth of 5.3% in Q2 2014 to £45m. It has seen an increase of 2.9% YTD with further growth is expected for Q3 (+11.4%) due to summer blockbusters and a weak corresponding quarter in 2013. AA/Warc forecasts overall growth of 6.7% in 2014.
Internet adspend rose 17.2% in Q2 2014, following growth of 14.0% in Q1. This represents an increase of 15.6% for H1. AA/Warc anticipates overall growth of 15.1% in 2014. Expectations for mobile growth in 2014 have been moderated down from July’s forecast of 75% to 56%.
Direct mail adspend recorded a YOY increase of 1.0%, to £461m in Q2 2014. The sector recorded an overall decline of 3.0% for H1, following a 6.7% fall in Q1. AA/Warc expects expect direct mail to see marginal growth in the second half, registering a full year decline of 1.0% in 2014.
For press enquiries please contact: Greenfields Communications
Wes Rogers wrogers@greenfieldscommunications.com T: (0) 203 287 3262
Lucy Green lgreen@greenfieldscommunications.com T: 07817 698366
Warc
Suzy Young, suzy.young@warc.com T: +44 (0) 20 7467 8140
Advertising Association
Glen Christie glen.christie@adassoc.org.uk T: 020 7 340 1107 / M: 07719 979999
About the Advertising Association/Warc Expenditure Report
The Advertising Association/Warc quarterly Expenditure Report is the definitive guide to advertising expenditure in the UK. Impartial and independent of any media channel or agency affiliation, it is the only source of historical quarterly adspend data and forecasts for the different media for the coming eight quarters. With data from 1982, this comprehensive and detailed review of advertising spend includes the AA/Warc’s own quarterly survey of all national newspapers, regional newspaper data collated in conjunction with the Newspaper Society and magazine statistics from Warc’s own panels. Data for other media channels are compiled in conjunction with UK industry trade bodies and organisations, notably the Internet Advertising Bureau, the Outdoor Media Centre, the Radio Advertising Bureau and the Royal Mail.
All data net of discounts and includes agency commission, but excludes production costs. The survey was launched in 1981 and has produced data on a quarterly basis ever since.
Methodology for Warc’s quarterly forecasts
Analysis of annual adspend data over the past 30 years shows that there is a link between annual changes in GDP and annual changes in adspend (after allowing for inflation, and excluding recruitment adspend). Over this period, GDP changes account for about two thirds of the change in adspend. Warc has developed its own forecasting model to generate forecasts for two years based on assumptions about future economic growth. The model provides an indication of likely overall spend levels – adjusted to allow for short-term factors (Olympics, World Cup etc).
The Expenditure Report (www.warc.com/expenditurereport) launched online in February 2010 and combines data from the discontinued print publications the Quarterly Survey of Advertising Expenditure and the Advertising Forecast. Alongside over 200 ready-made tables, subscribers can create their own customised tables for analysis of different media and time periods, as well as track the different media’s share of adspend. All reports can be exported from the online interface. An annual subscription costs £710 for AA members and £1,100 for non-members.
About the Advertising Association
The Advertising Association promotes the role, rights and responsibilities of advertising and its value to individuals, the economy and society. We are the only organisation that brings together agencies, brands and media to combine strengths and seek consensus on the issues that affect them. Through engagement and evidence-based debate we aim to build trust and maximise the value of advertising for all concerned.
About Warc
Warc is the global provider of ideas and evidence to marketing people. It has produced trusted and independent data on advertising expenditure and media costs for more than 25 years, and has partnerships with leading advertising organisations in more than 80 countries. Warc’s premium online service, www.warc.com, is the largest single source of intelligence for the marketing, advertising and media communities worldwide.
