UK ad spend tipped for growth in 2017 despite Brexit headwinds but publishers face further slump
Advertising spend is tipped to grow 3.2% in 2017 in the UK buoyed by consistent growth in internet advertising, quashing fears that a hard Brexit will grind the industry to a halt, according to the latest AA/Warc Expenditure Report.
UK ad spend tipped for growth in 2017 despite Brexit headwinds
The forecast follows reports that UK ad spend rose 4.2% in the quarter following the vote to leave the European Union (EU), an increase the Advertising Association (AA) said shows the industry is “defying uncertainty” caused by the referendum. It marked the seventh consecutive year of growth in the UK’s advertising market.
Advertising on social platforms, particularly via mobile devices, is tipped for the biggest growth in 2017 as marketers shadow media consumption habits. Mobile is expected to overtake desktop to become the primary internet advertising medium in 2017, according to Zenith’s Advertising Expenditure Forecasts.
In 2017, TV is expected to match its growth from the previous year at 1.6%. Surprisingly, spend in video-on-demand (VOD) spots is expected to slow to 12.4% year-on-year in 2017, down from more than 20% growth in 2015. The TV spot will remain the largest display format by spend in 2017, according to James McDonald, senior data analyst at Warc.
Publishing is the biggest sector tipped for further declines in 2017, although the extent of the declines has slowed since 2015. National newsbrands are forecasted for a -7.9% decline in ad spend, as digital growth of 2.2% fails to offset declines in print advertising. A gloomier outlook for regional newsbrands puts overall ad spend at -8.6%, while magazines newsbrands slow ad declines to -5.1%.
Overall UK ad spend is tipped for a 3.2% growth, a decline of nearly 5% from 2015 but a positive outlook for a country preparing to exit the European Union. This is despite a projected drop in merger and acquisition activity by two-thirds in 2017 compared to a record year in 2016 due to uncertainty over the terms of the UK’s exit from the EU, according to a report by law firm Baker McKenzie.
"That ad spend held up after the referendum is another marker of the strength of the UK’s advertising and media industries," said Stephen Woodford, chief executive at the Advertising Association. "As the government gears up for Brexit negotiations and a new industrial strategy, it must prioritise protecting this global advantage."