8th July 2014:
Strong performances for TV and Radio in Q1 2014 and the improving
economic outlook have led AA/Warc to revise its forecasts upwards
for the UK’s ad market. According to the latest Expenditure
Report, growth rates are predicted to reach 6% in 2014 and 6.7% in
Tim Lefroy, Chief Executive at the Advertising Association
said: “These latest adspend data are another nudge up for the
economy, and a feather in the cap of UK global leadership in
online and mobile, with consumers getting more value each day.”
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 solely on
estimated or modelled data. 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.
TV and Radio to enjoy welcome boost in Q2 from the World Cup
Total UK advertising expenditure increased by 5.0% in Q1 2014 to
reach £4,441m, ahead of the 4.5% growth predicted in April. Spot
TV advertising saw a revenue increase of 6.0% in Q1 to reach
£1,100m. This should accelerate to 10.5% growth in Q2 as TV
enjoys a significant boost from the World Cup. The rate of
increase should ease in the third quarter, reflecting the impact
of budgets brought forward specifically for the tournament.
Overall 2014 is expected to deliver a 6.5% increase compared with
Radio also posted a
positive start to the year, rising by 5.7% in Q1 compared with
the same period a year ago. Q2 is expected to show healthy growth
(+7.6%), before it slows for the rest of the year. AA/Warc
expects radio to register an annual increase of 4.4% in 2014, the
sector’s best performance since 2003.
Karen Fraser, Strategy Director at the AA said: “This
latest set of data shows the importance of global events such as
the World Cup to advertising spend in the UK. Following a
positive start to the year in Q1, Q2 is set to be a strong
quarter for the sector, buoyed by the tournament.”
These results ensured total display saw a strong start to 2014,
increasing by 3.1%. Across the year an increase of 4.7% is
forecast, followed by a further increase of 5.8% next year.
Recruitment benefits from the improving economy
After recording 21 quarters of decline out of the last 25, spend
on recruitment advertising is finally showing signs of recovery.
Adspend grew in both the final quarter of 2013 (+3.7%) and the
first quarter of 2014 (+2.6%). Growth is expected to continue
through to 2015. Total recruitment spend is predicted to reach
£521m this year.
At-a-glance media summary
TV spot advertising
grew 6.0% in Q1 2014, and is expected to benefit from
increased adspend around the World Cup in Q2 (+10.5%).
Overall TV should record 6.5% growth compared to 2013.
branded content) rose by 5.7% in Q1 2014 vs Q1 2013. We
expect radio to register annual growth of 4.4% in 2014, the
sector’s best performance since 2003.
Out of home While 2014 has
started with a year-year-on-year drop of 2.2% to £990m, we
forecast overall growth of 2.7% for the year, a downgrade of
1.8pp from our April report.
newsbrands print ad revenues declined more
than anticipated in Q1 2014, down 8.3% compared with 2013 to
£286m. While digital adspend rose 19.0% for the same period
to £47m, it was not sufficient to offset the print drop,
with the sector as a whole recording a 5.2% dip. Forecasts
have been downgraded for 2014 to –1.9%.
newsbrands continued to decline in Q1 2014, with
adspend down 6.8% compared with the same period last year.
This represents a 9.7% drop for print (to £263m) and an
18.6% increase for digital revenues (to £39m). We anticipate
an overall decline of 7.3% in 2014 – in line with 2013.
Magazine brands saw adspend dip
3.8% in Q1 2014, following a 6.5% decline for print (to
£172m) and a 6.3% uptick for digital (to £53m). Total
adspend is predicted to record a 2.1% decline in 2014.
registered slight year-on-year growth of 0.4% in Q1 2014,
reaching a value of £36.3m. Growth is expected to accelerate
throughout 2014, notably in Q3 (+10.6%) when buoyed by
summer blockbusters. We anticipate overall growth of 6.4%
Internet ad spend grew
15.6% in 2013, to £6.3bn. With a growth rate of 95.2% in
2013, mobile is expected to continue to grow rapidly, by 75%
in 2014 and 47% in 2015. Total internet adspend (including mobile)
is expected to increase by 14% in 2014.
Direct mail adspend dropped
by 1.4% in Q1 2014. We expect marginal growth for the
remaining quarters and an overall rise of 0.6% for the year
as a whole. New data from the Royal Mail show addressed
mail’s advertising revenue reached £1,882m in 2013, a year
on year dip of 1.2% compared with 2012.
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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
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.
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
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.
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.