GROUPM REPORT PREDICTS MODEST UK AD SPENDNG GROWTH THIS YEAR AND NEXT
Growth Levels Still Robust Compared to European Neighbors
LONDON—Advertising spending in measured media in the U.K. is expected to show a 3.4 percent increase this year, a modest hike in light of the upcoming Olympics here yet robust compared to growth levels in other European countries.
The report, “This Year, Next Year: U.K. Media and Marketing Forecasts” said measured ad spending in the UK is expected to reach a total of £13.2 billion ($20.6 billion USD) in 2012, up from £12.7 billion ($19.9 billion) in 2011.
The study, released today by GroupM Futures Director Adam Smith, also predicted that U.K. ad spending in 2013 would increase 3.2 percent to £13.6 billion ($21.3 billion).
“With every source of final demand growth stalled—consumer, government, corporate fixed investment and foreign—U.K. advertising investment remains at maintenance levels, lagging even nominal GDP growth,” said Smith.
Regarding the imminent start of the Summer Olympics here and the games’ impact on advertising, he added: “The Olympics effect cannot be quantified but is small in media. It has mattered more to sponsorship and public relations.”
Smith also pointed out that despite the modest figures, U.K. advertising spending and growth far surpassed anticipated levels in countries throughout Western Europe.
“According to our forthcoming global forecasts, the U.K. is leading media growth among the larger western European countries,” he said. “Germany and France are barely positive in 2012 while Italy and Spain are expected to contract about 8 percent.”
The report pointed out that in ad spending in digital communication platforms continued to show the most significant growth while spending in newspapers, both regional and national, showed the sharpest declines.
“Digital spending growth already represents a quarter of the entire U.K. marketing economy, and it continues to grow,” Smith said. “Smartphone proliferation has suddenly made mobile search an urgent priority, while bestowing long-awaited targeting intelligence at scale. Mobile devices are also fuelling second-screen usage, which is another digital revolution in the making: versatile, universal and ergonomic.”
According to the report, digital spending will exceed £5.3 billion ($8.3 billion) in 2012 and is expected to reach £6 billion ($9.4 billion) in 2013, indicating an 11 percent increase. Meanwhile, spending on regional newspapers will total £1 billion ($1.6 billion) in 2012 and is expected to drop to £971 million ($1.5 billion) next year—a decline of 11 percent. Spending on national newspapers should fall from £1.2 billion ($1.9 billion) in 2012 to £1.1 billion ($1.7 billion) in 2013—a drop of 5 percent.
“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 are available to the media upon request.
GroupM is the leading global media investment management operation. It serves as the parent company to WPP media agencies including Maxus, MediaCom, MEC and Mindshare. Our primary purpose is to maximize the performance of WPP’s media communications agencies on behalf of our clients, our shareholders and our people by operating as a parent and collaborator in performance-enhancing activities such as trading, content creation, sports, digital, finance, proprietary tool development and other business-critical capabilities. The agencies that comprise GroupM are all global operations in their own right with leading market positions. The focus of GroupM is the intelligent application of physical and intellectual scale to benefit trading, innovation, and new communication services, to bring competitive advantage to our clients and our companies.