GroupM predicts rise in U.K. ad spending

Advertising spending in measured media in the U.K. is expected to show a 6.3 percent increase this year, the fastest growth of any major, mature consumer economy, and well ahead of the 4 percent global ad investment growth GroupM predicts for 2014.

The report, “This Year, Next Year: U.K. Media and Marketing Forecasts,” details measured ad spending in the U.K. is expected to reach a total of £14.9 billion ($23.3 billion) in 2014, up from £14.0 billion ($21.9 billion) in 2013. The study, released recently by GroupM and prepared by Futures Director Adam Smith, also predicts that U.K. ad spending in 2015 will increase 5.7 percent to £15.7 billion ($24.5 billion).

“Advertising and the wider U.K. economy are growing well, but are vulnerable to private debt and public austerity at home, and external problems of weak demand, especially in the Eurozone. Low U.K. wage growth remains a constraint, ameliorated for now by cheaper oil and price competition,” stated Smith.

According to the report, digital spending will reach £7.1 billion ($11.2 billion) in 2014 and is expected to reach £8.1 billion ($12.6 billion) in 2015, indicating a 13 percent increase. “The familiar drivers are video, social and mobile, but the underlying reason is more practical and attractive formats for brands – richer, more trackable, more targeted and more clickable,” said Smith.

Traditional TV's share of ad budgets is holding steady at 26%, and TV audience prices have risen in 2014. 'This happens when firm advertiser demand meets fixed or falling audience supply. The longer- term question is whether online will wrest investment from TV with the ease it did from press media. This is a fairer fight, which will unleash creativity and force scrutiny of simple broadcast versus ‘addressability at scale.’”

Print media remain under the most pressure, with 2014 advertising in physical newspapers and magazines expected to drop below £2.5 billion ($3.9 billion) — a decline of 9 percent from 2013. GroupM forecasts a further 9 percent fall in 2015 to £2.3 billion ($3.5 billion). However, Smith adds, “Demand for digital news-brand inventory is rising at least, as well as for digital media generally. Reputable brands value reputable digital environments.”

“This Year, Next Year” is part of GroupM's media and marketing forecasting series drawn from data supplied by holding company WPP's worldwide resources in advertising, public relations, market research, and specialist communications. Copies of the full report may be purchased from www.groupmpublications.com.