UK 2020 Adspend To Fall To GBP 21.4bn

Adrian J Cotterill, Editor-in-Chief

The latest Advertising Association/WARC Expenditure Report shows UK adspend is predicted to fall 15.6% year-on-year in 2020 to GBP 21.4bn, which is a slight improvement on the drop of 16.7% forecast back in April. The data unfortunately demonstrates the big impact that #COVID19 continues to have on advertising and the wider UK economy.

Keith Weed, President, Advertising Association said “It is vital that our industry continues to do all it can to support the recovery, most pertinently by joining the ‘Enjoy Summer Safely’ coalition to help mainstream essential public health messages. It has been incredibly impressive to see how our industry has so quickly rallied together to carry public health campaigns and other initiatives to inform and assist people across the country.”

New figures for Q1 2020 show total adspend rose 2.9% year-on-year to reach GBP 6.4bn, just as the #COVID19 crisis was beginning to take hold. This contrasts with the 39.0% decline estimated for Q2.

The 1.1pp improvement in the outlook this year, from -16.7% to -15.6%, is linked to the estimated impact of recent measures announced by the Government to stimulate consumer spending. However, with high unemployment levels expected well into next year, alongside the possibility of a second COVID-19 wave this winter, year-on-year growth is not expected before Q2 2021. Growth is then anticipated to be substantial, with total 2021 adspend forecast to be 16.6% higher than 2020 – this assumes a successful vaccine will be in place. Despite this growth, total 2021 adspend is still predicted to be lower than the 2019 figure of GBP 25.3bn, meaning pre-COVID-19 levels of adspend will not be seen until 2022 at the earliest.

The data show online and digital formats performing strongly in Q1 2020 – search and online display grew by 10.1% and 11.8%, respectively, while video on demand (VOD) recorded growth of 11.3% and online national newsbrands saw a rise of 14.2%. However, these are all expected to see a significant fall in Q2 2020 due to the impact of the pandemic and the consequent lockdown. The biggest falls are predicted to be for cinema with a 100% decline and out of home with a 70.4% decline. These media are both forecast to record some of the largest gains in 2021, with digital out of home seeing a rise of 38.7% and cinema witnessing the highest increase of all formats at 79.6%.

Philippa Brown, Chair, Advertising Association & CEO, PHD said “These figures point to light at the end of the tunnel, which will come as a welcome relief to companies and colleagues across the advertising and media industries. While the focus remains on returning our economy to growth, it is also important we keep focus on the social recovery too and what this means for our industry around such issues as climate change and building a truly inclusive workforce, areas central to the Advertising Association’s work over the coming months.”

The stark figures reinforce the Advertising Association’s call for a tax incentive scheme for advertising and marketing services, with the aim of stimulating investment and encouraging advertisers to continue, or return to, advertising. Such a plan would also encourage companies that do not currently advertise, typically SMEs, to invest in advertising and act as a stimulus for the wider economy.

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