U.K. Market Update: September 2021


We have made upward revisions to our forecasts of media companies’ advertising revenues for 2021. We now expect the overall advertising market to grow by 30% this year vs. our previous estimate of 24%. This is mainly due to stronger than expected growth in television and digital which we explore below. Further, macroeconomic conditions continue to reflect a favourable context for advertising market growth.

Headline UK GDP growth figures calculated on a sequential quarterly basis suggest a slowing economy.  However, when we look at economic growth on a year-over-year basis, 2021 should post the third-strongest growth rate since 1955 in real, non-annualised terms at 4.8%. What does this tell us? That we have rebounded strongly from the economic malaise of last year but that we are still hitting ‘speed bumps’ such as staff shortages, supply chain issues (some of which appear to be attributable to Brexit) and rising infection rates. While these are risk factors on the horizon, we think that they are likely manageable and so we expect to see strong growth through the end of this year and into the next.

As a final point, it should be clear by now that the media consumption habits of different audiences can vary so much that decision-making based on average analyses will often lead to below-average outcomes. The same is true when media budgets are derived from aggregate media revenue data. So, we remind you that just because across media companies in the UK, 77% of advertising revenue goes to digital media platforms, it is not necessarily the case that your media budget should reflect a similar composition. Indeed, our estimates show that the typical large advertiser in the UK allocates 40% of their media budgets to digital.