UK advertising expenditure is forecast to total £19.6bn in 2015, according to the latest data from the Advertising Association/Warc Expenditure Report. This is comfortably the largest total ever recorded, and represents a 5.7% annual increase from 2014. Receipts for 2014 are expected to total approximately £18.5bn, following growth of 5.8% from 2013. These rises also represent the best consecutive growth period since the millennium.
The largest medium for adspend – since surpassing TV in 2011 – is internet, with pure play digital revenues of £7.0bn forecast this year. The pure play figure excludes digital revenues from magazines and newsbrands as well as those from broadcaster VoD, however it does include mobile revenues, which have risen significantly over the last five years.
In 2015, one in every three pounds spent on internet advertising will be specifically for mobile, up from 1/20 in 2011. Furthermore, annual mobile display and search revenues are each expected to surpass £1bn for the first time this year.
TV adspend, comprised of spot, sponsorship, product placement, advertiser funded programming and broadcaster VoD revenue, is forecast to amount to some £5.2bn this year – again a record high. The majority of this will be invested in traditional spot advertising, with expenditure having risen just under £600m over the last five years alone. Second in the TV mix is sponsorship, with expected adspend of just over a quarter of a billion this year, followed closely by broadcaster VoD, which is forecast to have doubled its revenue since 2012.
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Direct mail, including unrequested catalogues and vouchers/money-off coupons, will remain the third-largest medium for adspend this year, although expenditure will have decreased some 26% from a peak of £2.4bn in 2004.
Advertising revenues for national and regional newsbrands are also in decline, however the rate for both is lessening as rises in digital revenues begin to offset shortfalls in print. The same is true for consumer magazines, while B2B magazines are actually forecast to see an annual net rise in adspend this year, thanks to rising digital revenues.
Out of home advertising, benefiting from the increased prevalence of digital technology, is estimated to have attracted adspend of over £1bn in 2014 – another first – while further growth of 3.3% is expected this year. Cinema advertising is also projected to be in good health in 2015 (up 10.9% to £210m), while radio (including branded content) is forecast to see its best year for adspend since 2007, reaching £591m.
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Despite the encouraging growth forecast across the industry this year, UK advertising expenditure, when measured at constant 2005 prices (thus removing inflation), is still some way off its pre-recession peak of £16.3bn recorded in 2007. On this measure, total adspend in 2015 is set to reach just £14.7bn.