UK adspend forecast downgraded to 4.2% in 2016

UK adspend will slow down during 2016 and 2017, according to the latest data from the Advertising Association and Warc - but still grow across almost every medium.

The AA/Warc Expenditure Report predicts total adspend in 2016 of £20.9bn – up 4.2% on last year’s actual total of £20.07bn. This year’s growth rate, however, is considerably lower than last year’s, 7.4%. Next year, adspend is forecast to grow 3.8% to £21.7bn.

Mobile adspend, which was just £2.63bn in 2015, is expected to hit £3.66bn this year and £4.52bn next year – meaning it will account for 21% of total spend, up from 13% in just two years.

Mobile is expected to account for almost all the growth in online advertising, with non-mobile spending staying roughly flat. In total, online adspend will rise from £8.61bn in 2015 to £10.64bn in 2017, when it will make up just under half of all spend.

TV spending will remain healthy, with percentage increases each year similar to the overall figures.

But the picture much worse for print. National newsbrands, which saw ad revenues last year fall 10.8%, are expected to see almost identical declines this year and next. In regional newsbrands and magazines, meanwhile, the drop in adspend is expected to accelerate. In all three cases, small increases in digital spend will do little to halt the decline.

The AA said its forecast had been revised down since April, due to downgraded expectations for newsbrands and direct mail, which is also forecast to decline – but said that despite some uncertainty on the back of Brexit, the outlook was positive.

"These numbers suggest that, despite uncertainty, our sector is resilient," said AA chief executive Tim Lefroy. "Government can underpin that by taking every step possible to build advertiser confidence, promote the UK as a global advertising hub and ensure we remain open to the world’s best advertising talent."

  2015 (£m) 2016 (£m) 2016 Change 2017 Change
TV 5,270 5,458 3.6% 3.1%
Radio 592 609 2.9% 1.7%
Out of home 1,059 1,101 4.0% 2.1%
National newsbrands 1,222 1,098 -10.1% -10.8%
Regional newsbrands 1,176 1,062 -9.7% -8.5%
Magazine brands 941 886 -5.9% -7.0%
Cinema 240 243 1.3% 2.4%
Internet 8,606 9,665 12.3% 10.1%
  of which mobile 2,627 3,660 39.3% 23.4%
Direct mail 1,841 1,708 -7.2% -5.0%
TOTAL UK ADSPEND 20,071 20,904 4.2% 3.8%

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