Expenditure Report Q2 2017:

UK advertising delivers strongest H1 on record.

How did Q2 2017 shape up?

Our latest expenditure report results see a record H1 for UK advertising. The all-time high investment, since monitoring began in 1982, highlighted in Advertising Association / WARC Expenditure Report data has been driven by increased spend on digital advertising.

01 


UK advertising expenditure grew 3.7% to £10.8bn during the first six months of 2017, the largest H1 total of any year since monitoring began in 1982.
 

The 3.7% rise in ad spend during the first half of 2017 means we are 2.1 points ahead of forecast.

In inflation-adjusted terms, the UK’s ad market grew by 1.2% during both Q2 and H1 2017.

Advertising Association WARC Expenditure Report Q2 2017

02 

The record investment highlighted in Advertising Association/WARC Expenditure Report data has led to an upgraded forecast for 2017 of 3.1% growth which indicates annual spend in excess of £22bn.  

This is an upward revision of 1.1 points since our last forecast in July, and aligns with the projection we made at the start of the year.

The upgrade owes mostly to stronger-than-expected internet growth during the first half of 2017 (+13.8% vs. a forecast +9.5%), with search in particular outperforming our expectations.

Advertising Association / WARC Expenditure Report Q2 2017
Advertising Association / WARC Expenditure Report Q2 2017

03 

Overall market growth is being driven by increased spend on digital advertising.  

Digital – defined as internet and digital out of home (DOOH) – accounted for 54% of all advertising spend in the first half of the year, some £5.8bn of a total £10.8bn committed by advertisers.

With internet formats removed from the total, the amount spent on ‘traditional’ media is expected to decline by 3.9% in 2017.

04 

This was the 16th consecutive quarter of market growth, and the strongest rate since Q4 2015.  

The first half growth was boosted by a 4.0% year-on-year rise during Q2.

UK advertising expenditure rose 4% year-on-year to a total of £5,359m during the second quarter of 2017, an uptick from the (upwardly revised) 3.4% growth recorded during the first three months of the year.

Advertising Association / WARC Expenditure Report Q2 2017
Advertising Association / WARC Expenditure Report Q2 2017

05 

Mobile growth of 36.1% was the main contributor to a 13.0% rise in internet spend during the quarter.  

Other digital formats are also performing strongly, including national newsbrands (+7.9%), regional newsbrands (+10.4%), TV broadcaster video-on-demand (+10.6%), digital out of home (+30.4%) and digital advertising formats for radio (+38.9%). Other media – cinema (+14.4%) and direct mail (+0.8%) – also recorded growth during the second quarter of 2017.

Stephen Woodford, Chief Executive at the Advertising Association:

“Spend on advertising is showing strong resilience, at a time of real uncertainty for UK business. We know advertising has a positive effect on the economy, with every pound spent generating six pounds of GDP, so it is good to see steady, sustained growth. The upgrade of our 2017 forecast by a further one percent, the equivalent of an additional investment of £190M, should be seen as a cautious indicator for continued growth in the UK economy.”

Stephen Woodford, Chief Executive, Advertising Association

James McDonald, Senior Data Analyst at WARC commented: 

“The latest data highlight the importance of mobile to advertisers in the UK – spend on mobile ads accounted for the entirety of internet growth during the second quarter of 2017 and 97% over the first six months of the year. As mobile usage and credit-fueled consumer spending continue to rise, investment in mobile advertising will track ahead of other platforms this year.”

Archive releases

Expenditure Report Q1 2017: The headlines

UK advertising trends have become increasingly complex over recent months. Understanding what’s driving growth over the short, medium and long-term is a challenge, but one that’s essential if brands and agencies are to optimise their investment and media owners are to respond to market demand.

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