UK Firms To Spend 3.1% More On Advertising In 2013 Said Warc/AA

UK businesses are forecast to raise their advertising spend by 3.1% to £17.2 billion this year, a level seen previously before the onset of the financial crisis, highlighted in a report jointly prepared by Warc and the Advertising Association (AA). Marketers remain broadly cautious due to the challenging environment and, although predictions have been curtailed in line with the worsening economic prospects, the researchers are upbeat that growth in the field will surpass 3% in 2013. 

The projection is based on estimates that local firms would have spent £16.8 billion on advertising last year, up by 1.8% compared with the previous 12 month-period. In the third quarter alone, businesses lifted advertising expenditure by 0.8% in annual terms to a combined £4 billion.

During the three-month period, Internet advertising continued to gain traction, going up by 10.9% and pushing the annual figure to an estimated £5.3 billion. Cinema advertising rose by 1.7% in the quarter, bringing its share in the 2012 advertising mix to £187 million in money terms.

Out of home advertising registered its biggest year-on-year improvement since 2000, jumping by 25.4% to £270 million in the quarter. The spike could be attributed to marketers’ rush to look for alternative advertising channels during the Olympic games, which were aired on ad-free BBC. As a result, out of home advertising is estimated to have grown by a greater-than-expected 8.7% rate in 2012.

The “Olympic Effect” had an adverse impact on TV advertising as well, which recorded a 7.2% drop in expenditure in July-August. Radio and press also lost some of their appeal to marketers, with advertising expenditure dropping by 4% and 9.6%, respectively.