Total advertising spend fell by 12% in 2009, the biggest fall since measurement began in 1982. The data is now trending towards a return to modest growth in Q1 2010 – two quarters earlier than previously expected. AA/Warc has also upgraded its full-year 2010 forecast from 0.4% growth to 2.3%. The AA/Warc Expenditure Report is the most comprehensive measure of UK advertising activity, encompassing a range of sources including print, cinema, TV and digital.
“It won’t surprise anybody that the industry has had a tough year,” says Tim Lefroy, Chief Executive at the Advertising Association. “But as confidence returns, it is clear that forward-thinking organisations are stealing a march on their rivals by investing in advertising.”
AA/Warc forecasts suggest that the UK advertising industry, which employs approximately 250,000 people and contributes over £6.2 billion of value to the UK economy, will grow particularly strongly in Q2 2010 (+3.6% y/y). Television advertising, boosted by the World Cup, is predicted to perform strongly having returned to growth in Q4 2009 and advertising on-line will continue to grow.
Significant trends in advertising spend in 2009 included:
• Cinema and internet advertising bucked the trend for overall decline, with each increasing spend by 6%
• Press advertising was hit hardest, down 23% on the previous year
• Recruitment advertising fell 42% year-on-year with regional newspapers particularly badly hit
• Business magazines saw display revenues drop by almost 30%
Suzy Young, Data Editor at Warc, says: “There is now clear evidence that the industry has seen the worst of the recession. Structural challenges, particularly with print media, remain and the recovery is fragile but for advertisers, agencies and media alike, the prospects for 2010 look considerably brighter.”
The AA/Warc Expenditure Report, based on actual advertising spend, is a unique benchmark of the status of the UK advertising industry and has been running for 28 years. The newly launched online-only format for the AA/Warc Expenditure Report is available at www.warc.com/expenditurereport.
All figures quoted in this press release are at current prices.
About the Advertising Association/Warc Expenditure Report
The AA says: “The Advertising Association/Warc Expenditure Report is a comprehensive, quarterly review of advertising spend on all major UK media. All data is net of discounts and includes agency commission, but excludes production costs. The survey was launched in 1982, and has produced data on a quarterly basis since. Total UK advertising spend for 2008 was £18.6 billion.
An annual subscription to the AA/Warc Expenditure Report costs £1,025. Members and affiliates of the Advertising Association pay a discounted price of £660.”
Methodology
The press data is derived from information provided directly by publishers of national newspapers, regional newspapers and business and consumer magazines. Television data is based on figures provided by various industry sources including Ofcom. Radio, Outdoor and Cinema data comes from the Radio Advertising Bureau (RAB), Outdoor Advertising Association (OAA) and the Nielsen Company respectively. The Royal Mail provides direct mail expenditure. Internet data is based on the Internet Advertising Bureau (IAB) survey carried out biannually by PricewaterhouseCoopers, and a survey of online recruitment specialists carried out by Warc. Sponsorship and promotions expenditure data has been excluded from the totals for both TV and radio for consistency purposes, as quarterly figures are not yet available for TV.
About Advertising Association
The AA says: “The Advertising Association (AA) represents all sides of the advertising and promotion industry in the UK - advertisers, agencies and the media. The advertising industry contributes £6.2 billion of value to the UK economy. Its remit is to promote and protect advertising, by communicating its commercial and consumer benefits. The AA seeks the optimal regulatory environment for the industry. Its goal is that advertising should enjoy responsibility from its practitioners, moderation from its regulators and trust from its consumers.”
About Warc
Warc says: “At the heart of Warc is Warc.com, a unique resource relied upon by major creative and media agency networks, market research companies, media owners, multinational advertisers and business schools to help tackle any marketing challenge. It provides online access to thousands of case studies, Best Practice guides that explain the ‘how’ and the ‘why’ of marketing challenges and brand profiles. Warc also provides adspend data, runs events and publishes leading journals including Admap, Market Leader and the Journal of Advertising Research.”
