GroupM predicts modest UK ad spend growth in 2012-13

Advertising spend in measured media in the UK is expected to show a 3.4 per cent increase this year, a modest hike in light of the upcoming Olympics here yet robust compared to growth levels in other European countries.

GroupM’s report, This Year, Next Year: U.K. Media and Marketing Forecasts says measured ad spend in the UK is expected to reach a total of £13.2bn (US$20.6bn) in 2012, up from £12.7bn (US$19.9bn) in 2011.

The study, released by GroupM futures director Adam Smith, also predicted that UK ad spending in 2013 would increase 3.2 per cent to £13.6bn (US$21.3bn).

“With every source of final demand growth stalled—consumer, government, corporate fixed investment and foreign—U.K. advertising investment remains at maintenance levels, lagging even nominal GDP growth,” said Smith.

Regarding the imminent start of the summer Olympics in the UK and the games’ impact on advertising, he added: “The Olympics effect cannot be quantified but is small in media. It has mattered more to sponsorship and public relations.”

Smith also pointed out that despite the modest figures, UK advertising spending and growth far surpassed anticipated levels in countries throughout Western Europe.

“According to our forthcoming global forecasts, the UK is leading media growth among the larger western European countries,” he said.  “Germany and France are barely positive in 2012 while Italy and Spain are expected to contract about eight per cent.”  

The report pointed out that in ad spending in digital communication platforms continued to show the most significant growth while spending in newspapers, both regional and national, showed the sharpest declines.

“Digital spending growth already represents a quarter of the entire UK marketing economy, and it continues to grow,” Smith said. “Smartphone proliferation has suddenly made mobile search an urgent priority, while bestowing long-awaited targeting intelligence at scale. Mobile devices are also fuelling second-screen usage, which is another digital revolution in the making: versatile, universal and ergonomic.”

According to the report, digital spending will exceed £5.3bn (US$8.3 bn) in 2012 and is expected to reach £6bn (US$9.4bn) in 2013, indicating an 11 per cent increase. Meanwhile, spending on regional newspapers will total £1bn (US$1.6 billion) in 2012 and is expected to drop to £971m (US$1.5bn) next year—a decline of 11 per cent. Spending on national newspapers should fall from £1.2bn (US$1.9bn) in 2012 to £1.1 billion (US$1.7bn) in 2013—a drop of five per cent.