According to the latest expenditure report from the Advertising Association and Warc, UK ad spend growth hit a five-year high in 2015 of 7.5%, boosting overall spend to £20.1bn. And Warc research analyst James McDonald is forecasting a further 5.5% rise this year and in 2017, pushing total spend past its 2008 high.
“In real terms, after accounting for inflation, the UK ad market will surpass its pre-financial crisis level for the first time next year. This recovery, we believe, will have taken a decade happen,” he says.
The rise of mobile has triggered much of the growth and will account for “almost all of the new online ad money in 2016”, according to McDonald. Mobile saw spend increase by 61.1% last year and its growth rate is expected to quicken to closer to 70% in 2016.
Spend on social formats grew by 65% to £922m last year, with £517m of that spent on mobile. McDonald believes the importance of mobile to the UK ad industry “cannot be downplayed”.
He points out that spend on mobile display topped search for only the second time last year. “This suggests that emerging digital forms of advertising, such as native and social, are starting to hold sway with marketers,” he explains.
Traditional formats flourish
Cinema advertising saw spend rise 20.8%, marking a new high of £238m and surpassing its 2012 peak, as consumers flocked to watch box office hits including Spectre and Star Wars: The Force Awakens.
Internet ad spend was the second largest riser, increasing by 17.3% to £8.6bn compared to 2014, while TV ad spend rose 7.3% to £5.3bn. McDonald says TV continue to grow this year with big audiences expected for Euro 2016 and the Rio Olympics.
McDonald concludes: “Advertising spend on social formats will continue to grow apace, as marketers mirror media consumption habits, while native/advertorial content will be adopted as a combatant to ad blocking. The Euro 2016 football tournament in June will boost TV spot ad spend, and investment in mobile-specific formats will continue apace.
“The out of home sector will continue to benefit from increasing digital panel penetration, and the introduction of a new programmatic trading network. The phasing in of programmatic trade and addressable ad platforms should also provide a fillip for the TV sector.”