Strong growth in online puts UK ad market back on track
From April to June, UK advertising spend increased 13.4% to £10bn, driven by stronger than expected growth in online formats.
UK advertising spend increased 13.4% to £10bn for the second quarter of 2024, largely driven by stronger than expected digital growth and weak 2023 comparable results, according to new figures from the Advertising Association (AA) and WARC.
This year, £4 out of every £5 spent on advertising has gone to digital formats, with the majority committed programmatically. From April to June, online display was up 21.6%, search increased by 12.7% and out-of-home (OOH) rose by 17%.
“The strong growth across the online sector in particular during the first half of 2024 has put the UK’s ad market on course for its best year since the millennium, if the post-pandemic recovery year of 2021 is discounted,” explains WARC director of data, intelligence and forecasting James McDonald.
The latest figures provide a picture of the year so far, indicating ad spend increased 13.5% to £19.6bn in the first half.
As a result, AA and WARC have upgraded its 2024 forecasts by 2.9 percentage points and now expect spend for the full year to reach £40.5bn – exceeding £40bn for the first time. This marks a 10.6% year-on-year increase.
Elsewhere, TV had its strongest quarter in over two years thanks to this summer’s Men’s Euros tournament, which contributed to 9% growth for the quarter.
“Advertising has a vital role in funding culture, media and sport,” says AA’ CEO Stephen Woodford. “The results of Q2 show how advertising can play a fundamental part in supporting the success of events such as the Men’s Euros, the Olympics and the Paralympics.”
Regional newsbrands and magazines registered their first growth since the pandemic bounce back of Q2 2022, with increases in spend of 1.9% and 0.5%, respectively.
Radio recorded 3% growth, although direct mail (-2.1%), national news brands (-3.5%) and online classifieds (-19.8%) were all down for the quarter.
Cinema returned to growth (up 6.4%) last quarter, however it was down 21.2% in Q2.
Looking ahead, AA and WARC predict the UK’s ad spend will reach £43.1bn next year, a rise of 6.5% and an uplift of 1 percentage point from July’s forecast, due to more favourable trading conditions and higher consumer spending.
Meanwhile, as inflation begins to ease on household budgets, the latest report notes prospects for UK economic expansion have again been upgraded this year – from 0.6% to 1.1%.
Additionally, UK advertising spend is currently expected to register annual growth ahead of key European markets, such as France (8%), Spain (5.7%), Italy (5.4%) and Germany (4%) in current prices.
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