A new report has stated that the UK’s advertising market is set to grow to 35 billion pounds by the end of 2022 as retailer’s up their spending towards the holiday season.
The Advertising Association and World Advertising Research Centre (WARC) came together to form the report, which was said to be based on direct data from UK media owners across the region.
The duo noted that while the growth, which stands at a 9.2 percent increase, is strong, it is ultimately a downgrade of 1.7 percent from July’s initial 10.9 percent forecast, where investment growth was estimated to reach 35.4 billion pounds.
The report suggested that a possible cause for this result could be due to rising inflation in the UK, putting pressure on both companies’ input costs and consumer spending.
“Higher costs are carving into advertisers’ margins and household budgets alike, and trading conditions are at their worst since the covid outbreak” said James McDonald, director of data, intelligence and forecasting at WARC.
Christmas period to see investments reaching 446 million pounds
While McDonald said that the current climate is leading to “muted expectations” for the Christmas quarter, the report still said that retailers were expected to spend 446 million pounds on advertising during this period.
The organisations went on to state that adspend is set to rise at a record-breaking 4.5 percent year-on-year increase, taking the market to 9.5 billion pounds in the fourth quarter.
Search advertising is also expected to lift by 7.3 percent, reaching 3.4 billion pounds, as e-commerce continues to play an important role in christmas shopping.
Additionally, while linear TV will likely remain flat at 1.7 billion pounds, video-on-demand is set to grow ahead of the broader market at 4.2 percent.
In the report’s Q2, advertisement investment growth was also reported in cinema, 2,208 percent, national newsbrands, 9.1 percent and occupational outlook handbook, 46.4 percent.
For the coming year, 2023, WARC did find a potential slow in growth however, with the market looking to reach 36.2 billion pounds at a rate of 3.9 percent. Much of that growth is said to be reliant on online adspend, which could reach 75.2 percent.