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AA/WARC predicts that TV ad spend will achieve largest quarterly increase in over a decade

A new report published by WARC – the advertising insights and research company – in collaboration with the Advertising Association, forecasts that spend on advertising in the UK is set to rise by 24.8% this year to reach a total of £29.3B – the largest annual rise on record. TV advertising will experience its largest Q4 increase in over a decade.

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The advertising insights and research company, WARC, in collaboration with the Advertising Association (a body representing UK advertisers, agencies, media owners and tech companies) recently published a report that predicts tremendous recovery for the UK ad trade. It forecasts that ad spend in the UK will increase by 24.8% this year to reach £29.3B in total, which would represent the largest annual rise on record for the UK. The report updates a previous forecast in July by AA/WARC which predicted an 18.2% rise in UK ad spend.

Last year the UK experienced a £1.8B decline in ad spend, dropping by 34.1% in Q2 2020 during the first national lockdown. However, if ad spend in the UK continues to grow along the lines predicted by AA/WARC, it will signal the strongest ad trade recovery of any major European market.

Current figures already suggest a strong recovery, with spending on advertising reaching £7.7B in Q2 2021 – an increase of 86.5% from the previous year. With AA/WARC forecasting this figure will rise to £7.9B in Q4 2021 – the all-important Christmas season – the UK could experience its highest ever ad spend increase during this quarter, with an incremental rise of £929m on last year. Updating prior predictions for 2022, this latest report forecasts a 7.7% ad spend increase year-on-year.

Breaking the data down by media, AA/WARC reveals that TV ad spend saw a year-on-year change of +85.9% for Q2 2021 and +31.5% for H1 2021, with a forecast +22.9% change for the whole year. They also forecast an additional 0.6% year-on-year change for the whole of 2022. Notably, a significant portion of the increased spend comes from VOD, with +112% year-on-year change from Q2 2021 and +42.3% for H1 2021. The VOD ad spend year-on-year change is forecast to reach +34.1% for the whole of 2021 and +8.6% for the whole of 2022.

The speed at which the UK’s ad trade is recovering is made even clearer when compared to global figures. The predicted percentage increase in UK ad spend for the whole of 2021 is double that of the equivalent global figure (12.6%) forecast in WARC’s Global Ad Trends report. Compared to the global rise in ad spend of 23.6% in Q2 2021, the 86.5% UK rise during the same time, is astonishing.

Despite growth being forecast globally, WARC notes that only three regions – North America, Europe, and Asia Pacific region –  are predicted to have larger ad markets than they did prior to the pandemic, by 2022. The year-on-year growth for ad spend globally is forecast to be 8.2% in 2022, bringing the total global advertising market to above $700B.

James McDonald, Head of Data Content, WARC commented: “The latest data demonstrates bullish trade in the UK’s advertising sector despite potential inflationary headwinds and supply chain disruption in the run up to Christmas. Strong fourth quarter projections for TV – a medium heavily leveraged by retailers during the golden quarter – and search, which encompasses activity on ecommerce platforms, suggest it will be largely business as usual for the industry this year.”


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