UK to continue strong advertising spend despite Brexit – mobile ad expenditure grows 39%

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UK advertising expenditure is forecast to reach 4.2% growth this year and 3.8% growth in 2017, according to the Advertising Expenditure Report from the Advertising Association and Warc. That’s good news for marketers in the UK following the decision to leave the European Union in June 2016.

The advertising market in the country had a strong start during Q1 2016 with expenditure rising 4.2% to reach £5,7bn, passing the £5bn mark for the first time.

Latest Advertising Expenditure Report results

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Source: warc.com

Tim Lefroy, Chief Executive at the Advertising Association said:

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“These numbers suggest that, despite uncertainty, our sector is resilient. Government can underpin that by taking every step possible to build advertiser confidence, promote the UK as a global advertising hub and ensure we remain open to the world’s best advertising talent.”

However, Brexit has made a mark and overall forecasts were revised downward at -1.3pp for 2016 and -1.7pp for 2017. That’s largely due to downgrades for newsbrands and direct mail.

At the same time, Internet ad spending has been revised upwards by 0.8pp to 12.3% in 2016, with mobile advertising set to increase 39.3% during the same period.

Mobile has accounted for 96% of total Internet ad growth, with spending reaching 55.9% in 2016 to £830m in Q1 2016.

James McDonald, Data Analyst, Warc, said that the results showed that there was no “advertising recession on the horizon”. He adds:

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“We know from analysis of some 35 years’ worth of expenditure report data that the health of the UK ad industry closely relates to the prosperity of the overall economy, and while official growth forecasts have been revised down for the latter, there is no current indication that an advertising recession is on the horizon. Consumer confidence has dipped in recent weeks while retail sales data has softened too. Household consumption comprises roughly two-thirds of the UK’s economic output, so encouraging consumers to spend is vital. We need our marketers to continue to drive innovation in a dynamic and inherently creative sector. Keeping calm and carrying on would be a welcome course of action.”

He adds that the move towards digital marketing is likely due to political uncertainty, with online advertising considered a safe bet among many advertisers.