Total growth was 4.4% in 2016, the latest Advertising Association/Warc Expenditure Report estimates – a drop of 0.8 percentage points on its previous forecast for the year.
The AA and Warc said that the changes had been influenced by new data streams being added to its data back to the the start of 2015, which meant the adspend it estimated for 2015 was now higher than before, and so the latest growth forecasts are not directly comparable to the previous set.
The downgrade came despite spend in the third quarter of the year reaching £5.14bn, marking the first time the July – September period has broken the £5bn barrier. The year-on-year growth in the quarter was 4.2% – lower than the 5.1% in the first half of the year.
In 2017, the report is predicting growth of 3.2% – down from 3.3% in the last edition, and 3.8% three months before that. The grand total of UK advertising is now thought to have hit £21.15bn in 2016, and will reach £21.82bn this year.
Stephen Woodford, chief executive at the Advertising Association, said: "That adspend held up after the referendum is another marker of the strength of the UK’s advertising and media industries. As the government gears up for Brexit negotiations and a new industrial strategy, it must prioritise protecting this global advantage."
March towards mobile dominance continues
Internet advertising in 2016 grew 14.4% to £9.96bn and accounted for 47.1% of the total, the report estimates. This year it will grow a further 9.5% to £10.9bn, just shy of half the total.
Mobile, meanwhile, continues to move closer to accounting for half of all digital spend. In 2016 it was £3.83bn and made up 38.4% of the total; this year it will reach £4.82bn and make up 44.2% of digital spend.
The only other media to outgrow the total ad market in 2016 were cinema, up 9.2% to £262m, and outdoor, up 5% to £1.11bn. But both will slow down this year, growing at 2.4% and 2.2% respectively, slower than the overall market.
The next healthiest, radio, will also slow from last year’s 3.9% growth, with total sales of £637m, to 2.1% in 2017.
But TV – the largest non-internet medium by far – is set to avoid a further slowdown, after 2015’s 7.3% growth collapsed to just 1.6% in 2016, taking its value to £5.35bn. It is forecast to hit the same 1.6% growth this year.
And the hard times for print and direct mail are set to continue. National newsbrands suffered an adspend decline in 2016 of 9.8% to £1.1bn; regional newsbrands were down 11.9% to £1.04bn; and magazines fell 6% to £885m. The three formats are set to lose a further 7.9%, 8.6% and 5.1% this year respectively
Direct mail, which grew slightly in 2015, fell 10.4% last year to £1.71bn, and is next year forecast to lose a further 7.8%.
James McDonald, senior data analyst at Warc, said: "Advertising on social platforms, particularly via mobile devices as native articles and videos, will continue to garner surging investment this year as marketers shadow media consumption habits.
"Yet despite this emerging trend, the TV spot, an industry staple, will remain the largest display format by spend in 2017."