UK Television Ad Spend Grew in 2015, Additional Growth Forecasted for 2016


UK-Flag-200x200Barely a week goes by when we don’t see fresh evidence of TV’s glacial decline. Just last week an annual survey by research agency Childwise found that young people now use the Internet for three hours a day on average, compared with just 2.1 hours sitting in front of the television. However, TV ad revenues aren’t just holding up – they’re growing. UK television (spot) advertising rose 10.8 percent to exceed £1bn for the first time in a third quarter in Q3 2015, according to an Advertising Association/Warc Expenditure Report* data published today.

Annual TV ad spend amounted to $4.9 billion in 2015 and is estimated to have grown by 7.8 percent on 2014.

Adspend 2014 (£m) 2014 vs 2013 Estimate 2015 Forecast 2016
% change % change % change
TV 4,911 5.8% 7.8% 6.2%
  of which spot advertising 4,463 5.4% 7.3% 5.4%
  of which broadcaster VOD 145 15.1% 17.2% 20.6%

Looking at the market as a whole, UK advertising expenditure grew 6.8 percent year-on-year in Q3 2015 to reach £4,646m, the strongest third quarter on record. Cinema spend grew 21.7 percent year-on-year in Q3 and, with the release of new James Bond and Star Wars films in Q4, estimates for 2015 ad spend growth have been revised up to 9.4 percent.

The growth was was partly driven by the Rugby World Cup. Internet spend grew 13.2 percent and mobile’s rapid rise continued, increasing 40.2 percent for the quarter – mobile spend accounted for 29 percent of the internet total, up from 23.5 percent in Q3 2014.

With the ongoing concern about the state of the global economy this year, at this point it seems likely that UK ad budgets will continue to be strong throughout 2016. Warc and the Advertising Association have revised 2016 forecast revised upwards 0.2pp to 5.6 percent. Adspend is set to break the £20bn annual spend mark for the first time this year.

 

  Adspend 2014 (£m) 2014 vs 2013 Estimate 2015 Forecast 2016
% change % change % change
 
 
Radio 575 7.2% 2.8% 4.2%
Out of home 1,019 3.0% 3.4% 4.9%
National newsbrands 1,370 -4.7% -9.3% -4.6%
  of which digital 214 16.3% 6.0% 7.8%
Regional newsbrands 1,253 -3.6% -5.0% -3.8%
  of which digital 174 24.7% 19.9% 15.0%
Magazine brands 993 -4.3% -5.5% -3.5%
  of which digital 267 5.9% 4.9% 5.6%
Cinema 203 9.7% 9.4% 3.1%
Internet 7,223 15.4% 13.5% 11.3%
  of which mobile 1,625 59.1% 45.2% 35.3%
Direct mail 1,835 -1.1% 2.1% -0.2%
TOTAL UK ADSPEND 18,583 5.9% 6.1% 5.6%
Broadcaster VOD, digital revenues for newsbrands and magazine brands and mobile advertising spend are also included within the internet total of £7,223m, so care should be taken to avoid double counting. Radio includes branded content. From Q1 2015, the IAB has included spend for outstream/in-read video for the first time. This amounted to approximately £32m in the first half of 2015.
Direct mail data for 2013 have been supplied by Royal Mail according to its new methodology – please refer to About the AA/Warc Data for detail.
Source: AA/Warc Expenditure Report, February 2016

Methodology: The Advertising Association and Warc claim their Expenditure Report is ‘the definitive measure of advertising activity in the UK’, as they say it is the only source that uses advertising expenditure gathered from across the entire media landscape, rather than relying solely on estimated or modelled data.


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