Advertising spend is on a roll, but to what extent depends on whose figures are trusted.
The Advertising Association says that ad spend reached £10 billion in 2024 to reach £19.6 billion in the first six months of 2024, growing at a faster rate than in other countries around Europe. While 80% of the money today goes to digital formats, spending on traditional print formats, magazines and regional news, both increased in the second three months of the year, the first increase since the post pandemic bounce back quarter in Q2 2022.
The growth however followed declines in the first quarter and did not recoup all the lost ground. This while regional news gained 1.9% in spending in Q2 this was after a 1.2% decline in the first quarter. The magazine sector grew 0.5% in Q2 following a 1.8% fall in the firth three months of the year.
According to the Advertising Association spending on out of home, both digital and print, increased 17% after a 16.7% rise in the previous quarter. It was the opposite story for direct mail which according to the Advertising Associations slipped a further 2.1% on top of 2.3% decline in the quarter before.
However, the latest IPA Bellwether report for Q3 has figures that contrast with these, even if there is not necessarily a direct like for like comparison. According to the Bellwether report direct marketing in Q3 continues its “impressive growth streak” with a 9.7% increase on top of an 8.9% in the previous quarter. Out of home recorded the biggest drop in Q3.
Events continue to be a growing area of spend because they offer opportunities for face to face interactions.
Both agree that digital channels are taking the lion’s share of spend. The Bellwether report says that media advertising increased 4.3% in the quarter, up from 3.5% for the previous three months. However, the bulk of this went on high cost video campaigns.
Overall it says that the uncertainty over the long term outlook for the economy is making marketing departments more cautious about how budgets are spent. Bellwether anticipates a 0.6% growth in advertising spend for 2025, with the Advertising Association predicting a 6.5% increase.
CEO Stephen Woodford says: “The advertising industry is once again driving UK growth, helping businesses to compete, promote innovation and support jobs. It is an essential engine of the economy and key to the Government’s central ambition to achieve the highest sustained growth in the G7.” His opposite number, IPA director general Paul Bainsfair says: “Looking to the positives, this quarter’s results reveal that companies aren’t cutting their marketing budgets; they are pressing pause until they know more about the Government’s economic plans. As clarity emerges, this may indeed prove to be a temporary dip in overall marketing spend rather than the start of a long term downward trend.
“Building on this, it is worth noting that our ad spend forecast has been revised up for 2024 and 2025 because the economic data has been so strong so far this year, and that main media growth strengthened to a one-year high while sales promotion budget growth slowed – both of which are signals of bullishness.”
