Last year was the UK ad market’s strongest year on record, according to the latest expenditure report from the Advertising Association/Warc.
The report estimates the ad market grew by 26.4% year on year in 2021, which equates to a market value of approximately £30bn – supporting the idea advertising has had a greater recovery from the pandemic than expected.
Actual figures show the July to September quarter delivered the largest UK summer adspend in history at a total of £7.3bn, three percentage points and £183m ahead of the forecast.
All media exhibited growth in the double-digits during the third quarter in the UK due to the summer welcoming back sporting events including the Euros, Olympics and Paralympics, in addition to the easing of coronavirus restrictions.
Out-of-home grew by 62.6% to £270.4m and cinema adspend rose 655.9% to £20.2m. The tremendous growth in cinema was largely attributed to the much anticipated James Bond release No Time to Die in September.
Predictions for 2022 are buoyant – the AA/Warc report suggests UK adspend will reach £32.2bn across the year, a further 8.5% growth from 2021. This would mean the national ad market will have expanded by more than a third since 2020.
James McDonald, director of data for intelligence and forecasting at Warc, said that the impact of the Omicron variant on the advertising trade appears “reasonably muted” and that 2021’s recovery is now seeping into 2022.
McDonald said: “While inflation is set to act as a headwind on both the consumer and media buyers alike in the coming months, we have little reason to believe that the UK’s ad market won’t achieve growth of 8.5% this year – well ahead of the average recorded during the decade preceding the outbreak.”
The first three months of 2022 will be particularly strong for TV adspend, according to the AA and Warc. The report upgrades its prediction for overall adspend growth in the first quarter of this year from 10.5% to 12.6%.
If the forecasts are correct, cinema will experience triple-figure year-on-year growth again in 2022 (201.1%) and out of home’s recovery will continue with a 26.8% rise.
The growth will also continue in the biggest channels with TV adspend expected to rise 5.3% year on year in 2022, online display predicted to climb 8.3% and the search ad market forecast to expand by 11.1%.
Stephen Woodford, chief executive at the AA said: “A strong advertising market is a key indicator of the UK economy’s growth, with every £1 spent on advertising generating £6 GDP.
“The latest AA/Warc report brings welcome news not just for our industry but for the wider economy, as advertising investment is a key lever for businesses to capture new markets and drive their recovery.”
“It is all the more important therefore that the government recognises the need to support industry-led skills training to complement the demand for digital skills required to keep this market booming.”
The AA’s figures were released ahead of Renew 2022, a flagship conference in partnership with ISBA and the IPA, which takes place virtually on 27 January.