Ad market to surge by £3bn to hit £17bn by 2017, says PwC report

The UK will maintain its position as the second largest market for entertainment and media in EMEA, with Germany taking the highest spend, according to the report.

Meanwhile consumer spending on entertainment and media will see slower growth, adding £2bn at 1.8 per cent compounded annually to reach almost £33bn.

The report has cited internet and outdoor advertising, internet access, along with video games and TV advertising as the areas which will see the fastest growth during the next five years.

Internet access spend will grow over the next five years to £15bn, driven by mobile device access which is set to double to £9bn by 2017, according to the report.

The UK will also remain Europe’s largest online ad market throughout the period, and is expected to grow to £8bn by 2017 – up from £5bn in 2012.

PwC’s head of UK entertainment & media Phil Stokes said consumer’s access to entertainment and media content and experiences is being driven to “new heights”, due to the rapid growth of smart device ownership.

“While profitable growth is difficult to achieve in the current climate, digital technology has plenty of potential to help, both in the way that organisations are structured, and in generating new products and services that are centred on the needs and outcomes that really matter to customers.

“In amongst the big data, finding the ‘little data’ that allows informed management decisions will be key and new measurement techniques and models will give a competitive edge. The biggest challenge will be extracting the ‘little data’ that provides true understanding of consumers’ future behaviour, and striking the right balance between consumers’ desire for relevance, and their emotional and regulatory right to personal data privacy.

“Companies which can attract and retain the right workforce and which innovate in their products and the way they deliver them will survive and thrive. These companies, with real leadership, will remain relevant and for them, the outlook is bright,” he said.

The UK is the fifth largest OOH market in the world and Europe’s second largest, behind France, with revenues totaling £930m in 2012. This is set to grow 6 per cent each year to hit £1.24bn in 2017.

The market for video games in the UK was worth £3bn in 2012, and revenues are expected to grow by 5.4 per cent per year to reach £3.9bn in 2017.

TV advertising in the UK was worth £3.7bn in 2012, and revenues are due to see a 4.7 per cent hike to reach £4.7bn in 2017. PwC predicts the UK to be one of the global leaders in online TV advertising behind the US.

Newspapers, B2B publishing and consumer magazines are due to see revenues fall during the period, with subscription TV revenues to overtake the newspaper industry in 2017, according to the report.