The latest Advertising Association/WARC Expenditure Report has downgraded its 2021 forecast to a return-to-growth of 14.4%, lower than the figure of 16.6% predicted in July. Growth in 2021 will fall just short of offsetting this year’s losses completely, meaning the UK’s ad market is now not expected to recover fully until 2022.
Stephen Woodford, Chief Executive, Advertising Association said “These stark figures demonstrate the strain that all parts of the advertising ecosystem were under during the second quarter. Large parts of our industry and the wider economy were effectively shut down. Events of recent weeks have shown this will be no straight-forward recovery as different parts of our country enter or leave local conditions at varying speeds. We must boost growth and support jobs through an advertising tax credit and a skills programme to aid colleagues facing unemployment. It is essential that our workforce, business, and Government work together on the recovery plan for our industry and our country.”
Adspend is set to fall by 14.5% this year to GBP 21.5bn as a result of the COVID-19 outbreak, equating to a loss of GBP 3.6bn compared to 2019. The final quarter of this year – traditionally the Golden Quarter for retail and adspend because of the Christmas Advertising season – is set to see a 10.5% drop to a total of GBP 6.2bn, some GBP 724m lower than the previous year.
The latest industry data also show that UK adspend fell by 33.8% in Q2 2020 at the height of the nation’s lockdown. This was the worst ever quarter recorded for the UK’s advertising industry and contributed to a 14.9% dip over the first half of the year, equating to a loss of GBP 2bn when compared to the same period in 2019.
The new data show investment fell across all advertising formats in Q2, with some sectors that were shut down, such as cinema, and those that lost significant amounts of consumer contact, such as out-of-home and direct mail, seeing significant declines. As the population was encouraged to remain at home, online and digital formats performed relatively less badly than others, though each recorded their first annual falls in advertising investment.
Looking ahead to 2021, cinema adspend is forecast to rise by 138.3% as picture houses reopen and films that have been postponed make it to screens. Other media predicted to perform well year-on-year include out-of-home (+57.1%), regional news brands (+16.2%) and magazine brands (+18.8%), underpinned by strong growth in their online formats.