The UK advertising market will not recover until 2022 after sinking to record lows this year as a result of the coronavirus outbreak.
Ad spend is set to come in at £21.5bn this year, marking a fall of £3.6bn — or 14.5 per cent — compared to 2019.
The figures come ahead of the crucial last three months of the year, known in retail and advertising as the Golden Quarter due a surge in trading in the run-up to Christmas.
But with further winter lockdowns looming, ad spend in the key festive period is set to drop 10.5 per cent to £6.2bn — £724m lower than the same time last year.
The report, compiled by the Advertising Association and Warc, also warned that the sector’s recovery was likely to be slower than previously anticipated.
The industry bodies revised their forecast for a return to growth to 14.4 per cent in 2021, down from the 16.6 per cent predicted in July.
As a result, growth in 2021 will fail to offset this year’s losses, meaning the UK ad market is now not expected to fully recover until 2022.
“Events of recent weeks have shown this will be no straight-forward recovery as different parts of our country enter or leave local conditions at varying speeds,” said Stephen Woodford, chief executive of the Advertising Association.
“We must boost growth and support jobs through an advertising tax credit and a skills programme to aid colleagues facing unemployment. It is essential that our workforce, business, and government work together on the recovery plan for our industry and our country.”
The report also revealed that UK ad spend plunged by more than a third at the height of the pandemic in the second quarter, marking the worst period ever recorded for the industry.
Investment plunged across all segments over the quarter, with cinema advertising and out-of-home advertising suffering the sharpest drops.
Online and digital formats posted the smallest declines over the quarter as Brits stayed at home, but they still recorded their first annual falls in investment.
While the forecasts for recovery in 2021 remain subdued, cinema and out-of-home are set to see the largest year-on-year growth as films return and footfall picks up.
Regional newsbrands and magazines are also forecast to recover thanks to strong growth in their online formats.
“The short-term outlook is extremely challenging, but we share the longer-term optimism that the market will return to growth, even if the full recovery takes up until 2022,” said Ali MacCallum, UK chief executive of out-of-home Kinetic Worldwide.
“The recovery and growth of out-of-home as a channel is testament to how out-of-home will continue to engage and inform mass audiences, as we navigate through Covid-19.”