AA/Warc Report Paints Mixed Picture For UK Advertising Market

There have been a number of reports recently with an overall optimistic tone, either revealing increased advertising expenditure in one segment or another or forecasting growth for the rest of the year and further ahead.

The new Expenditure Report by the Advertising Association and Warc does both, but certain details warrant a description of the UK situation as “a mixed bag”.

To begin with, the AA/Warc Expenditure Report puts first-quarter adspend (direct mail excluded) at £3.5bn, which amounts to a year-on-year increase of 1.1%. But when inflation is taken into account, the result is a decline of 2.3%, Warc reported on its website.

In addition, some media channels had a very hard time indeed during the period. Digital revenues, for example, rose by 11.1% and the Internet grew its ad market share to 36.2%, adding 3.3 percentage points. Cinema posted a rise of 9.5%, radio revenues were 6.9% higher and outdoor exited the quarter with an increase of 3.1%. However, print suffered a 10% slump and its market share dropped to 25.2%, down 3.1 percentage points. Television adspend slipped 0.7% and the medium accounted for 28.4% of total revenues.

Looking at 2012 as a whole, AA and Warc expect advertising expenditure (minus direct mail) to climb by 2.5% to £14.7bn. Internet adspend is forecast to expand by 10.1%, reaching £5.3bn, while television is seen to achieve a 0.3% uptick to £4.2bn. On the downside, the 2012 prognosis represents a downward revision of the AA/Warc forecast issued in April. In addition to shaving off 1.3 percentage points from this year’s figure, the new report has also downgraded the 2013 projection by 0.5 percentage points.