TV and internet ad spend increases drive growth to strongest rate in three years - but mobile fails to meet hype, AA/Warc figures show

Increasing TV and online ad spend have led to advertising in the UK growing at its fastest rate in three years, yet mobile growth has failed to meet projections, according to Advertising Association (AA)/Warc's latest figures.

Figures: TV and internet advertising have seen increases

According to the data overall ad spend grew by 8.5 per cent year-on-year for the second quarter of 2014, reaching £4.5bn, representing the fastest rate of growth since Q3 2010.

Internet ad spend continued to rise reaching £1.7bn in Q2 2014, a rise of 17.2 per cent year-on-year, taking its H1 tally to 15.6 per cent growth. AA/Warc projections put overall 2014 growth at an expected 15.1 per cent.

However, mobile projections have been reduced from 75 per cent to 56 per cent for 2014 after growth in the first half of the year failed to meet projections.

Total UK ad spend increased by 6.3 per cent year-on-year for H1 2014 and the full year forecast has now been revised upwards to 6.4 per cent from six per cent in July. However, projected ad spend for 2015 has been revised down by 6.7 per cent to 6.5 per cent.

Warc data director Suzy Young told The Drum: "The 2015 forecast has been adjusted to allow for the better than expected growth this year - in July we were predicting six per cent for 2014 and 6.7 per cent for 2015. Now it's 6.4 per cent and 6.5 per cent.

"For mobile advertising, we've revised down because the actuals released by the Internet Advertising Bureau at the start of October weren't as strong as we had predicted, with growth of around 65 per cent for both quarters. We expect growth at a slightly lower rate in H2, hence the 56 per cent."

TV advertising saw a year-on-year increase of 10.7 per cent to £1.1bn and an overall increase across the first half of 2014 of 8.3 per cent, partly boosted by the World Cup, while radio enjoyed a 17.7 per cent year-on-year increase to £119m.

Out of home, cinema and direct mail saw year-on-year increases of 6.4 per cent (£259m), 5.3 per cent (£45m) and one per cent (£461m) respectively.

Tim Lefroy, chief executive at the Advertising Association, said: “Growth at twice the rate of UK GDP is quite a headline, but the real story is of digital and creative leadership in e-commerce.

“As the Eurozone wobbles, it’s a reminder that out consumer economy is central to the UK’s economic narrative.”

The data also found that recruitment advertising has now reported three consecutive quarters of growth after being in decline for 21 of the previous 23 quarters. For Q2 2014 recruitment advertising was up by 5.8 per cent year-on-year.

The figures were less positive for news and magazine brands with ad spend continuing to decline. Print ad revenues for national newsbrands dipped by five per cent in Q2 to £296m and by 5.2 per cent to £280m for regional newsbrands.

Digital ad spend continued its ascent – up by 9.9 per cent to £48m for national titles and a more substantial 27.9 per cent for regional brands to £44m – but that failed to counter overall projected declines for 2014.

Magazine brands followed a similar trend, with print ad spend down by 10.2 per cent to £188m and digital ad spend up by five per cent to £66m.

Ad spend is predicted to fall by a further 3.3 per cent overall for the year.

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