Shaking off the effects of the pandemic and countless lockdowns, the UK is set to see ad spend grow 18.2% to £27.7bn in 2021, according to the latest report from the Advertising Association and Warc. Never before has such a dramatic surge been recorded by the organization. The Drum explores the findings.
This regular expenditure report collects advertising revenue data across the entire media landscape to predict the momentum of ad spend. In 2021 growth is predicted to hit 18.2% – a welcome improvement from the previously forecast 15.2% from April.
The momentum accumulated fast too, with an estimated 54.7% rise during the second quarter of the year. This coincides with the roll-out of the vaccination program and the loosening of lockdowns.
It is the fastest ad spend increase on record, making up 2020’s £1.8bn decline. Growth will slow to a predicted 7.7% rise in 2022, taking the market to £30bn. 2021 will surpass the previous high of 15.9% growth from 1988 (records start 1982). Meanwhile in Q1 2021, spend is only 0.8%, behind a paltry 1.8% predicted.
Warc is also predicting that the UK “is on course to achieve the fastest ad trade recovery of any major European market this year, and one of the strongest growth rates across 100 global markets”.
Here’s how each media is affected.
Where will the spend go?
The fastest growth is attributed to some of the hardest-hit media: cinema (315.6%), OOH (29.3%), DOOH (43.7%) and online classified (21.5%).
Online display – including social media and online video – will accelerate 17.2%.
Search is up 19.7%. TV will increase 15.1% in 2021 (almost doubling the 8.8% forecast).
In Q1, there was more pain for direct mail (-16.5%), national newsbrands (-18.7%) and regional newsbrands (-22.4%).
What they say
Stephen Woodford, chief executive of the AA, said the figures are “hugely encouraging”.
He said: “Advertising is a vital engine for growth, with each £1 invested in advertising delivering £6 back to GDP. The upward growth revision in spend growth this year – to reach a record of 18.2% – would mark an exceptional recovery, after the record declines in 2020.”
James McDonald, head of data content, Warc, marked that 70p of every £1 of UK advertising is invested in digital formats. “This is a rate that accelerated greatly last year and is now surpassed only by China. It is these formats that will lead absolute growth over the coming terms and none more so than paid search, which is seen to be benefitting from burgeoning e-commerce trade.”
The industry reacts
Craig Tuck, chief revenue officer of the Ozone Project, said the result “represents a much-needed shot in the arm for the market and a return to ‘business as (close to) usual’ for many advertisers”.
Neil McKinnon, marketing director of Infectious Media, said in response to 70% of spend going into digital: “We are no longer looking at a media world of digital-first, but digital everything.
“With traditional media increasingly becoming addressable through digital buying methods, advertisers need to accommodate for instantaneous feedback from campaigns.”
Meanwhile, Nicole Lonsdale, chief client officer of, Kinetic UK cites its Alfresco Life research to claim that OOH weekly reach is at 96% - back to pre-covid levels. That's around 31 million adults each day. OOH’s smart targeting capabilities can ensure that advertisers have robust plans in place, with the speed, agility, and flexibility... will prove a critical factor in Q4 and the lead up to Christmas."
Finally, Emma Lacey, senior director of buyer development at OpenX says the report is "incredibly positive" and she expects that "marketers should also be set to benefit from pent-up consumer demand".
She adds: "With digital media in particular, brands and agencies have a unique opportunity to innovate and capitalise on some of the changes that have happened in consumer behaviour over the past 12-18 months; whilst demonstrating to consumers that they understand how and when they should target them in this new post-covid era."
If you're feeling nostalgic for the more fallow periods of ad spend, check out our previous AA/Warc reports.