The latest Advertising Association/WARC Expenditure Report has forecast the value of the UK’s advertising market will grow by 9.2% in 2022, to a total of £34.9bn, a slight downgrade of 1.7pp from the previous forecast in July.
This is due to high levels of inflation and squeezed margins as the UK deals with supply chain inflation and subsequent rise in the cost of living. Within the media sector, advertisers are also facing higher media costs.
UK ad spend rose by 8.8% in Q2 2022, to a total of £8.6bn, while spend during the first half of the year was up 14.4% at £16.7bn. Advertising spend is projected to near £10bn during Q4, featuring the combination of Christmas and the World Cup.
Online advertising’s share of total ad spend is set to grow to a total of 74.% for 2022 and is expected to rise to 75.2% in 2023. Figures from our Digital Adspend study with PwC for Q1 2022 shows online classified advertising – including recruitment advertising and property listings – was up by almost a third. Broadcaster video-on demand continued to grow (+9.3%) as audiences turned to catch-up and streaming platforms.
Ad spend for the final quarter of 2022 is set to increase by 4.5% from last year’s record high, to a total of £9.5bn, setting a new record level of investment during the Christmas period. Search advertising – including ecommerce – is forecast to be one of the quickest growing media over the quarter, rising by 7.3% to a total of £3.4bn. Video-on-demand stands out amongst the wider market with expected growth of 4.2%.
Stephen Woodford, Chief Executive, Advertising Association, said: “It is encouraging to see strong figures in Q2, with media channels continuing their recovery from the COVID-19 pandemic. Looking forwards, political and economic stability is much-needed, given the inflationary and recessionary forces impacting all businesses. As companies navigate these pressures, we see them continuing to prioritise advertising investment to protect their brands in exceptionally challenging market conditions.”
| Media | Q2 2022
year-on-year % change |
H1 2022 year-on-year % change
|
2022 forecast year-on-year % change | Percentage point (pp) change in 2022 forecast vs July | 2023 forecast year-on-year % change |
| Search | 10.8% | 16.5% | 11.7% | -1.5pp | 6.2% |
| Online display* | 5.4% | 8.1% | 7.1% | -4.3pp | 5.9% |
| TV | -0.6% | 8.7% | 2.9% | -3.0pp | 0.5% |
| of which VOD | 9.3% | 17.2% | 10.1% | -3.2pp | 7.2% |
| Online classified* | 32.4% | 41.4% | 20.1% | +14.5pp | -4.5% |
| Direct mail | 3.8% | 9.5% | 2.8% | +3.0pp | -4.5% |
| Out of home | 46.4% | 79.1% | 31.2% | +2.3pp | 4.8% |
| of which digital | 48.2% | 78.8% | 32.3% | +1.8pp | 8.4% |
| National newsbrands | 9.1% | 12.6% | 3.4% | +2.3pp | -2.5% |
| of which online | 13.2% | 16.3% | 8.2% | +1.6pp | 3.7% |
| Radio | 7.0% | 13.1% | 6.2% | +0.8pp | 0.1% |
| of which online | 5.9% | 14.6% | 8.1% | -2.6pp | 6.3% |
| Magazine brands | 3.3% | 5.0% | 0.7% | +2.0pp | -5.9% |
| of which online | 3.9% | 9.9% | 5.4% | +1.4pp | -1.7% |
| Regional newsbrands | 0.6% | 10.3% | 2.6% | +2.6pp | -7.1% |
| of which online | 5.3% | 13.8% | 7.2% | -0.8pp | -0.5% |
| Cinema | 2,208.2% | 3,978.0% | 174.0% | -17.2pp | 21.1% |
| TOTAL AD SPEND | 8.8% | 14.4% | 9.2% | -1.7pp | 3.9% |
| Note: Broadcaster VOD, digital revenues for newsbrands, magazine brands, and radio station websites are also included within online display and classified totals, so care should be taken to avoid double counting. Online radio includes targeted in-stream radio/audio advertising sold by UK commercial radio companies, together with online S&P inventory.
Source: AA/WARC Expenditure Report, October 2022 |
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The Advertising Association/WARC quarterly Expenditure Report is the definitive guide to advertising expenditure in the UK with data and forecasts for different media going back to 1982.
