GroupM is forecasting the UK’s ad spend to grow by 4.8% in 2023, a marked increase on the figure set out by the Advertising Association (AA) and WARC in April, which suggested growth would stay stagnant at just 0.5% as brands remained cautious going into the second half.
The ad business is predicting UK ad revenues to reach $49.4bn (£39.3) this year. It also expects the UK’s growth to reach 5.3% in 2024.
Taking inflation into account, neither projection exceeds expectations hugely. However, GroupM’s slightly more optimistic approach to the next six months suggests there could be something to be positive about. In contrast, the AA/WARC forecast was a significant downgrade on its previous prediction which suggested spending would grow 3.8% this year, as suggested in January.
Advertising spend set to stall this year as impact of inflation drags onBut GroupM is expecting a “return to some kind of normalcy” in terms of advertising revenue growth, in part driven by the expansion of retail media, which is expects to grow by 9.9% globally. It expects retail media to represent 14.4% of total advertising revenue this year globally, and predicts that figure will reach 15.4% by 2028.
Elsewhere globally, digital channels are expected to grow 8.4%, alongside a small audio channel increase (0.3%) and OOH which has a double-digit growth prediction of 12.7%, aided by a 39.7% rebound in the Chinese market. Meanwhile, television declines to -1.2% and print drops to -4.8%.
“We are at an inflection point where the secular drivers of advertising growth above and beyond GDP growth are maturing, the pandemic upheaval is receding and the dynamic rise of digital advertising has slowed,” the business says.
However, it suggests the emergence of AI could change the mid-single-digit ad growth it’s predicting.