UK advertising recorded £10 billion (€11.9bn) spend during the second quarter of 2024, marking a 13.4 per cent increase, according to the latest Advertising Association/WARC Expenditure Report. This was just over four percentage points (pp) ahead of forecast owing to stronger-than-expected digital growth and the relatively weak comparable results for 2023. The latest figures now provide a picture for the first half of the year, showing adspend increased 13.5 per cent to £19.6 billion in H1.

AA/WARC has upgraded its forecasts for 2024, as a whole, by 2.9pp and now expects spend to cross the £40 billion barrier for the first time to reach £40.5 billion. This is largely due to better digital results and marks a year-on-year increase of 10.6 per cent, with real terms growth for 2024 expected to be 7.9 per cent. The latest report notes that prospects for UK economic expansion have again been upgraded– from 0.6 per cent to 1.1 per cent this year – as inflation begins to ease on household budgets. UK advertising spend is currently expected to register annual growth ahead of key European markets, such as France (8 per cent), Spain (5.7 per cent), Italy (5.4 per cent) and Germany (4 per cent) in current prices.

The full picture in Q2

The latest figures for April to June this year show key online formats registered growth, including online display (21.6 per cent) and search (12.7 per cent), alongside out of home (17 per cent). The Men’s Euro 2024 broadcast saw TV benefit from growth of 9 per cent for the quarter, representing the strongest quarter for TV in over two years and signalling its resilience. Regional newsbrands and magazines registered their first growth since the pandemic bounce back of Q2 2022 with increases in spend of 1.9 per cent and 0.5 per cent respectively.

The outlook for 2025

Looking ahead, AA/WARC expects the UK’s ad market to reach £43.1 billion spend next year, a rise of 6.5 per cent and an uplift of 1.0pp from July’s forecast. This is due to more favourable trading conditions and higher consumer spending.

Stephen Woodford, CEO, Advertising Association, commented: “The advertising industry is once again driving UK growth, helping businesses to compete, promote innovation and support jobs. It is an essential engine of the economy and key to the Government’s central ambition to achieve the highest sustained growth in the G7. Advertising has a vital role in funding culture, media and sport – and the results of Q2 show how advertising can play a fundamental part in supporting the success of events such as the Men’s Euros, the Olympics and the Paralympics.”

James McDonald, Director of Data, Intelligence & Forecasting, WARC, added: “Four in every five pounds spent on advertising so far this year has gone towards digital formats, money which has mostly been committed programmatically and which is increasingly leveraging AI tools for further efficiencies. The strong growth across the online sector in particular during the first half of 2024 has put the UK’s ad market on course for its best year since the millennium, if the post-pandemic recovery year of 2021 is discounted.”

Responding to the report, Jason Warner, Director, UK and EMEA, SBS, commented: “The increase in ad spend reflects the remarkable resilience that brands have shown in tough economic conditions – and that we are hopefully turning a corner. We’ve seen just how savvy advertisers have been with their digital advertising through their willingness to experiment with innovative ad formats and ability to tell their brand stories in ways that guide potential consumers from awareness right through to a sale or lead. However, with such a large portion of ad spend heading towards programmatic, focus needs to be on ensuring that efficiencies enabled by digital advertising and programmatic tech on offer are available to all independent agencies – not just larger players – so these agencies can stay relevant, competitive and continue to be the backbone of media.”

Virginie Dremeaux, Vice President, Marketing and Communications, International, FreeWheel, said: “The continued popularity of live TV for sports fans is evident in the latest report, with the Men’s Euros cited as a key driver of the rise in TV ad spend over the quarter. Advertisers recognise that tapping into the coverage of live sports on increasingly connected screens not only gives them access to a mass audience, but also provides advanced targeting and incremental reach.”

“The growth of streaming and the ongoing convergence of linear and digital leaves TV – in all its forms – in a strong position, as advertisers acknowledge its ability to engage consumers with high-quality content. The sustained popularity of BVoD highlighted in the report also shows that even amid the proliferation of new offers and platforms, BVoD remains very important in media companies’ business model,” concluded Dremeaux.

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Categories: Advertising, Articles, Markets, Research

Tags: advertising, FreeWheel, UK, WARC