According to the latest report from GroupM released this week, UK companies will spend £13.9 billion on advertising this year against £13 billion in 2012, exceeding the previous record of £13.1 billion in 2007. This will translate into year-on-year growth of 7%, which is more than twice the rate the marketing expert predicted half a year ago.
In its research, published under the title ‘This Year, Next Year,’ the media investment arm of WPP also forecasts that advertising spend in the UK will further grow to £14.8 billion next year, scoring an annual rise of 6%.
Digital ad spend, including paid search, will surge by 17% to £6.1 billion in 2013, bringing the share of digital in advertising budgets to 44% from 40% the previous year. Digital display advertising investment will trend 17% higher this year, strengthened by the stronger demand for video and social inventory. Digital display inventory is now becoming the norm for a large number of advertisers, and their appetite for such tools will be even more pronounced in 2014.
TV advertising is also expected to deliver solid growth, with investments going up 6.8% this year.
The recovery in the UK advertising market is “spectacular, but not a phenomenon,” GroupM futures director Adam Smith commented. Since 2008, the local economy has been improving at a rate of 9% in cash terms, which matches the pace scored in advertising. It would be interesting to see whether advertisers will maintain their optimism that local households feel wealthier and could get even wealthier between now and the election in 2015, he said.