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UK advertising posts record quarter as 2016 spend surges past £21 bn

MUMBAI: UK ad expenditure grew by 3.7 per cent to reach £21.4 billion in 2016, the seventh consecutive year of market growth, according to the Advertising Association/Warc Expenditure Report.

Growth in UK ad spend held steady in the third quarter after the June referendum, before reaching £5.8 billion in the fourth quarter of 2016, a rise of 3.9 per cent year-on-year and the highest grossing quarter on record. In real terms, after accounting for inflation, UK adspend topped its pre-recession peak for the first time during both the final quarter and for 2016 as a whole. Forecasts for the next two years indicate continued growth of 2.5 per cent in 2017 and 3.3 per cent in 2018.

Digital formats continued to drive growth in 2016, with internet adspend up by 13.4% to £10.3 billion, with mobile accounting for 99 per cent of that growth. Mobile spend reached £3.9 billion, with 86% of the current value of the mobile advertising market generated in just the past five years.

Digital accounted for 38 per cent of the £1.1 billion out of home advertising market in 2016, double the share digital recorded in 2012, while revenues from online ads were up for national news brands (+4.9% to £230m) for the fifth year running.

TV ad spend, boosted by 12.6 per cent growth in video-on-demand revenue, recorded a new high of £5.3 billion in 2016, with TV’s share of overall spend holding steady at 25 per cent over the last decade. Annual growth in ad spend was also recorded for cinema (+eight per cent to £257 million) and radio (5.4 per cent to £646 million) in 2016.

Advertising Association CEO Stephen Woodford said, “Advertising has proved resilient to uncertainty and behind these numbers is a cutting edge, digital business in which Britain is a world-beater. As we work towards Brexit, we’re urging Government to support UK advertising and do more to unlock its potential to grow UK plc.”

Warc senior data analyst James McDonald commented, “The UK’s ad industry is experiencing the most seismic shift since WARC began monitoring in 1982. Last year exemplified this, as over 95 per cent of the new money entering the market came from digital formats. The trend will continue as ad tech improves and consumers spend more time with their internet-connected devices.”