The UK advertising market reached a new milestone, with ad spend climbing to £9.2 billion in the first quarter of 2024, marking a 9.3% increase year-on-year. This growth, driven largely by stronger-than-expected online advertising, exceeded forecasts by nearly three percentage points, with online formats accounting for 79.7% of all UK ad spend in Q1 2024, according to the latest Advertising Association/WARC Expenditure Report.
Looking ahead, the AA/WARC forecasts anticipate a 9.2% rise in Q2 ad spend, reaching £9.7 billion, buoyed by the Men’s Euros and a snap General Election. This growth trajectory is expected to result in a 9.3% increase for the first half of 2024, totaling £18.9 billion.
The UK advertising market is projected to grow by 7.7% in 2024, reaching £39.4 billion, an upgrade of 1.9 percentage points from earlier forecasts. This surge is attributed to robust digital performance and heightened investment around Euro 2024. Significant growth is expected in various channels, including Out of Home (+12.5%), Search (+10.1%), and Radio (+5.5%). Notably, advertising spend on Broadcaster Video On-Demand (BVOD) is set to surpass the £1 billion mark for the first time, increasing by 13.7%, driven by strong demand from the Men’s Euros and other major sporting events.
A further 5.5% rise is anticipated in 2025, with the UK advertising market expected to reach £41.6 billion, marking an upgrade of 1.0 percentage points from the previous forecast.
Q1 2024 Highlights:
- Online Advertising: From January to March, search advertising (including retail media) grew by 12.0%, and online display (including social media) increased by 12.8%.
- Legacy Media: Cinema advertising saw a 6.4% rise, while TV grew by 1.2%, with BVOD experiencing a substantial 19.2% increase.
- Real-Term Growth: Adjusted for inflation, real ad spend growth in Q1 was 5.5%, indicating £465 million in organic growth as inflationary pressures eased.
- Sector Performance: The Consumables sector (including food & drink, cosmetics, and household FMCG) grew by 16.1%, and the Services sector (including leisure & entertainment, media, and transport) rose by 8.9%. Other major categories posted year-on-year declines.
Stephen Woodford, Chief Executive of the Advertising Association, commented, “It is welcome news to see real-term growth and upgraded forecasts in the advertising market in Q1 this year, a positive sign that our industry is one of the driving factors in the UK’s economic recovery. This is a timely reminder of its dynamism as the new Government seeks to create an environment for growth, through political stability and a new industrial strategy.”
James McDonald, Director of Data, Intelligence & Forecasting at WARC, added, “The race for AI adoption has intensified in the advertising industry, with major online platforms introducing their own solutions to market and subsequently reporting a positive contribution to their bottom line. The true impact of these tools will emerge in time, though first quarter results were certainly lifted by higher ad loads and associated performance costs online. That said, the enduring strength of legacy display media – chiefly TV, out of home, radio, and cinema – was also evident in the first quarter, and we expect this to have sustained into the second due in part to short term stimuli such as the Men’s Euros and snap General Election. Overall, our outlook for the coming year is brighter than our last projection in April, with a forecast 7.7% rise in total ad spend this year ahead of the average rate recorded before the pandemic.”
The quarterly Advertising Association/WARC Expenditure Report is the definitive guide to advertising expenditure in the UK, offering data for all key advertising media and sub-formats dating back to 1982 and forecasts spanning eight quarters ahead.
Full data analysis of the latest figures is available to AA/WARC Expenditure report subscribers on the AA/WARC ad spend hub.
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