UK Advertising Will Surpass £20 Billion For The First Time in 2019

Digital delivers all new net advertising growth by commanding a greater share of marketing effort overall; radio and out-of-home build audiences

UK advertising is expected to increase to £20.8 billion in 2019, surpassing the £20 billion mark for the first time, up from £19.9 billion in 2018 according to the latest media and marketing forecasts from GroupM, the world’s leading media investment group.

GroupM forecasts 6.0% growth for 2018, down from 6.4% in 2017. Its 2019 growth prediction from earlier this year is shaved to 4.8% from 5.1%. A significant contributor to global advertising growth, the UK still looks to remain stable due to the high levels of digital advertising growth. Digital is around 60% of all advertising investment and accounts for all net UK advertising growth. The medium continues to grow organically, predominately from SME investment, with signs that larger advertisers are becoming more circumspect about incremental digital investment.

Pure-play internet increased 11% in 2018 and is expected to continue growing by 9% in 2019. Slower than IAB’s estimated run-rate of 15% for 1H 2018, GroupM sees an inevitable slowdown, although digital is still likely to account for all new net advertising growth.

GroupM forecasts television advertising investment to remain flat in 2018, with 1% growth expected in 2019. According to Nielsen, key TV categories soft this year include Food, Household FMCG, Retail, Entertainment & Leisure. Finance (TV’s largest category) and Motors (fifth) are growing high-single-digit in the year to September. ‘Share deals’ remain the principal trading mode in UK TV, which advertisers value for its tolerance of short-run budget revisions, but mixed modes of airtime are becoming more routine as trading embraces more audience falling outside Barb’s ‘gold standard’. Facebook in particular, is still winning share of audio-visual advertising and is heavily video-biased for large advertisers. The main reason is convenience and the lust for ‘performance media’.

Print media continue to shrink, with newspapers (national and regional) plus magazines collectively shedding about 1.5 share points a year. In 2017, news brands included 12.5% of all ad investment and in 2018 11.1%, with 2019 estimated to drop to 9.8%. Even with mitigation from digital sales (now a large minority of ad sales), this reveals an investment trend of -6% in 2018 and -7% in 2019, as the ‘walled gardens’ capture more share. Armed with research, owners are putting up a united front with reassurance and stable media pricing; this has renewed advertiser enthusiasm for the medium.

Radio is holding its audience and enjoying rising demand. GroupM forecasts radio spot advertising revenue to rise 10% in 2018 and 7% in 2019. Radio owners will book about £500 million in spot revenue in 2018. This does not include digital and streaming revenues, which are an unmeasured mix of static and dynamic activity, and thus hard to estimate. The annual run-rate is probably above £100 million.

“Future Brexit fall-out remains a complete unknown, but for now the economy is doing OK. Ad revenue forecasts remain perhaps surprisingly positive, supported by digital commanding a rising share of overall marketing effort from a wider base of marketers large and small. The UK’s fluid media market favours optimism too. Advertisers know they can change spending plans almost at will, with low or no friction,” said Adam Smith, Futures Director, GroupM.

GroupM’s forecasted distribution of advertising investment is below:

Year Over Year Percentage Change
Media yoy % change	2017	2018	2019f
Media Category
TV	-2.4	0.3	1.0
Radio spot	5.8	10.0	7.0
National newsbrands	-5.6	-4.0	-9.4
Regional newsbrands	-9.1	-8.3	-8.8
Consumer magazine brands	-9.3	-7.5	-5.6
B2B magazine brands	-9.5	-2.4	-1.2
Outdoor	1.5	2.5	2.7
Cinema	1.8	1.0	1.0
Pure-play internet	15.1	11.1	8.6
Media	6.4	6.0	4.8

“Collaboration and measurement remain key topics for the UK alongside Brexit and GDPR in our advertising forecast for 2019, but in a sea-of-change advertising investment stays buoyant reaching unprecedented levels,” said Tom George, CEO, GroupM UK. “It’s encouraging to see the industry pulling together to create new and improved investment propositions. GroupM is highly engaged with all of these efforts to ensure our clients continue to effectively engage consumers.”