GroupM Predicts Continued Strength in UK Ad Spending
According to a study by GroupM, 'This Year, 'Next Year: U.K. Media and Marketing Forecasts', UK advertising expenditure is expected to grow 6.3% in 2015 to reach &pound;15.9bn, &pound;8bn of which will be on digital. This spend is expected to continue with spending expected to increase 4.8% in 2016 to &pound;16.6bn, &pound;8.7bn of which is digital spending (a YoY growth of 10%).&nbsp;
LONDON--(BUSINESS WIRE)--Advertising spending in measured media in the U.K. is expected to show a 6.3 percent increase this year, once again the fastest growth of any major, mature consumer economy.

The report, ‘This Year, Next Year: U.K. Media and Marketing Forecasts’ said measured ad spending in the UK is expected to reach a total of £15.9 billion ($24.8 billion) in 2015, up from £14.9 billion ($23.3 billion) in 2014.

The study, released today by GroupM Futures Director Adam Smith, also predicted that U.K. ad spending in 2016 would increase 4.8 percent to £16.6 billion ($25.9 billion).

‘Advertisers lack pricing power in a deflationary world. The focus on marketing cost and performance will remain, but there is no limit on innovation or differentiation. UK media investment demonstrates this. The largest contributor to growth is online display, the most innovative part of UK advertising today, in execution, formats and data’.

According to the report, digital spending will reach £8.0 billion ($12.5 billion) in 2015 and is expected to reach £8.7 billion ($13.6 billion) in 2016, indicating average annual growth of 10 percent. ‘The familiar drivers remain video, social and mobile, in which advertiser confidence is bolstered by data improving in quality and application, and by the many benefits of automation’.

Traditional TV's share of ad budgets is tracking fractionally upwards to nearly 27 percent in 2015, despite its younger 16-34 audience shrinking. ‘This is mainly new demand, not inflation of existing demand. Traditional TV impressions are coming off all-time highs in 2013, but advertisers continue to see value in the medium’.

Press media remain under the most pressure, with 2015 advertising in physical newspapers and magazines expected to fall 9 percent from 2014 and a further 10 percent fall in 2016 to £2.1 billion ($3.3 billion). However, Smith adds, 'Demand for digital news brand inventory is good. Adding back digital gains improves the sector’s trajectory 3 or 4 points. Publishers are making a sustained, unified effort to improve this with new focus on advertiser needs'.

'This Year, Next Year' is part of GroupM's media and marketing forecasting series drawn from data supplied by holding company WPP's worldwide resources in advertising, public relations, market research, and specialist communications. Copies of the full report may be purchased from www.groupmpublications.com.

Media, £m, net 2014 2015f 2016f TV 3,888 4,231 4,390 Radio 380 395 415 Newspapers (physical) 1,900 1,735 1,571 Magazines (physical) 618 544 490 Outdoor 815 842 870 Cinema 145 162 170 Internet 7,194 7,967 8,730 Media total £m 14,940 15,875 16,637 Media yoy % change 2014 2015f 2016f TV 4.7 8.8 3.8 Radio 10.6 3.9 5.1 Newspapers (physical) -7.4 -8.7 -9.5 Magazines (physical) -7.6 -11.9 -9.9 Outdoor 2.9 3.2 3.4 Cinema 4.3 11.7 4.9 Internet 15.4 10.7 9.6 Media 7.2 6.3 4.8

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