Skip to main content

Blog

Blog

Blog

ALF Insights

24 May 2024

Online spend driving advertising growth

Simon Ward
Driven by online formats UK ad spend climbed by over 6% last year, and, with economic conditions improving and major events forthcoming, there is confidence growth can be maintained in 2024 onwards.

The UK advertising market was worth £36.6bn in 2023 as the increasingly dominant online sector enjoyed double-digit growth, more than compensating for declines across most other media, and, in a reviving economy, the overall trend of upward spend is expected to continue through 2025 by which time it will exceed £40bn.

  • UK ad spend rose by 6.1% in 2023 (including 7.4% in Q4), and online formats now account for more than three-quarters of the total for the first time, according to the latest Advertising Association and WARC Expenditure Report.
  • However, high inflation acted as a brake, and, indeed, when this is taken into account, the ad market actually contracted by 1.2% in real terms last year, lagging the negligible 0.1% growth in the UK economy.
  • With major sports events and a general election to come, it is forecast that UK ad spend will rise by 5.8% to £38.8bn in 2024, and by a further 4.5% to £40.5bn in 2025, with the growth drivers continuing to be search, online display and out of home.
  • Amid the signs of economic recovery, marketing budgets increased in Q1 2024, although confidence was lower than at the end of 2023. The latest IPA Bellwether Report showed 24.4% of respondents recording an upward revision in budgets as against 15% that saw a contraction.
  • UK-based WPP was the largest ad agency in the world in 2023 based on turnover, but saw like-for-like revenue fall by 1.6% in the first three months of this year. However, it expects an upturn in the market in the second half of the year, a prognosis shared by rivals such as Publicis, Omnicom, IPG and Dentsu.

A full version of this Industry Insights article is available to ALF subscribers here.

 

 

 

View all Blog
Loading