Advertising expenditure forecast up despite Brexit uncertainty

 
William Turvill
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UK advertising spend is expected to increase 7.2 per cent this year (Source: Getty)

A WPP-owned group has upgraded its UK advertising growth forecasts for this year and next despite uncertainty around the UK’s Brexit vote.

Expenditure is expected to grow 7.2 per cent in 2016, up from a previous estimate of 6.3 per cent. The same level of growth is forecast by GroupM for 2017, up from 5.8 per cent.

However, traditional media advertising is expected to decline over these two years at a greater rate than expected – 2.6 per cent in 2016 and 1.4 per cent in 2017 – while pure-play digital will go in the opposite direction.

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Pure-play digital advertising is expected to grow 52 per cent this year, up one percentage point from the last estimate, and 55 per cent in 2017, up three percentage points.

“The effect of the future EU exit on the UK economy is unknown, but the short-term impact was negligible,” said GroupM futures director Adam Smith.

“To our own surprise, we are revising UK advertising growth up from 6.3 per cent to 7.2 per cent for 2016, and from 5.8 per cent to 7.2 per cent for 2017.”

He added: “The main driver that we have seen is paid search accelerating again.

“It benefits from rising automation and the immediacy needed for mobile and performance-minded advertising.

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“We expect digital display advertising to continue growing by 18 per cent in 2016 and 15 per cent in 2017.

“The ambition of pure play digital vendors to conquer TV territory and categories will be hard-won, but today's undisputed winner is pure-play digital.”

TV advertising spend is expected to decline 0.1 per cent this year, down from 10.4 per cent growth last year, and grow one per cent next year.

National newsbrands, meanwhile, are expected to see a decline of 12 per cent, matching last year’s figure, before improved slightly to a 10 per cent fall next year.

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