UK advertising expenditure increases 1.3% marking the slowest growth since 2013

UK advertising expenditure has grown 1.3% during Q1 2017 to $5.3 million, according to the latest Advertising Association/WARC Expenditure Report. However, that marks its slowest growth rate since Q2 2013.

Whilst traditional media fell with TV ad spend down 6.2%, digital formats had a good quarter. For national newsbrands, digital ad income was up 25.4%, whilst radio grew 8.1% and out-of-home rose 27.6%.

Total Internet advertising grew 10.1% year-on-year, with mobile formats noting the highest increase – up 36.2% compared to the previous year.

Search advertising expenditure also performed well with one in four pounds of UK ad spend attributed to search.

James McDonald, Senior Data Analyst at WARC, says:

“The latest data show that large retailers – particularly supermarkets – and major food brands reined in their TV spending by 25% during the first three months of 2017, instead committing to cutting prices on the shelves as household expenditure wanes.”

However, the outlook for total ad expenditure in 2017 has been downgraded to 2%. According to McDonald, higher inflation rates and slower wage growth are squeezing budgets. Business confidence has been low given the latest election results.

“These underlying stresses have resulted in a downgrade to our full-year expectations for UK ad market growth, almost all of which will come from digital formats,” McDonald noted.

Stephen Woodford, Chief Executive at the Advertising Association expects the overall market to remain fairly resilient, but hopes that the government will focus on “business beyond Brexit”.