The UK ad market is expected to see growth slow this year as increases narrow in digital and mobile spend and despite improvements in the traditional ad market.
Mobile accounted for nearly one in four pounds spent on advertising in the third quarter of 2017, a 30.7% rise year on year, according to the latest Expenditure Report from the Advertising Association and Warc.
Mobile ad spend is now expected to pass the £5bn mark in 2017, up from £3.9bn the previous year, with investment focused on video and social media. However, estimated growth for the whole of last year is expected to be 32.6% and this is predicted to slow to 20.7% in 2018. In 2016, growth was 44.8%.
Overall, UK ad spend rose 3.5% year on year during the quarter to £5.4bn, representing the 17th consecutive quarter of market growth, again driven by a rise in digital ad spend.
A positive quarter means the preliminary estimate for total UK ad spend during 2017 has been upgraded by 0.3 percentage points to 3.4% year on year, with the total figure set to hit £22.1bn.
Growth is expected to slow to 2.8% in 2018, however, with ad spend predicted to total £22.7bn.
Despite the vast growth seen in digital, concerns around media transparency and brand safety rapidly rose up the agenda in 2017, with many brands reviewing their relationships with agencies and digital spend as a result.
Procter & Gamble cut digital ad spend by more than $100m during the first quarter of 2017 with no detrimental impact on sales. In a statement at the time, CFO Jon Moeller said the company was in no rush to put money back into digital media. “Clearly we don’t need to be spending money that is seen by a bot and not a person. Clearly we don’t need to be spending money on ads that are placed in inappropriate places, and that’s why you see a significant reduction.”
Digital continues to drive growth
Collectively, digital ad spend including news and magazine brands, TV and radio was up 9.9%. Breaking it down by channel, digital ad spend for national news brands was up 21.5%, while radio saw 42.6% growth and video-on-demand grew by 13.3%
However, TV as a whole saw a 0.8% decline, as did out-of-home, while spend on national news brands declined by 5.1% and magazine brands by 11.9%. Cinema ad spend dropped by 8.4% during the third quarter.
Growth in digital radio ad spend led to 5.1% growth for the medium overall, while direct mail also saw a boost during the period, with ad spend up 5.9% compared to the same quarter last year.
“UK advertising spend enjoyed a record high in the third quarter of 2017, with figures up again year on year. It is encouraging to see further predicted growth of 2.8% for 2018,” says Stephen Woodford, chief executive at the Advertising Association.
“As we work through Brexit, we need to help Government make the best decisions to support our industry and, by extension, the wider UK economy as we target growth across the nations and regions and in an increasingly global marketplace.”
The post UK ad market growth to slow in 2018 as digital spend decelerates appeared first on Marketing Week.
Phvntom, Inc. is a digital marketing company located in Boise, Idaho that creates websites, apps, and full-scale promotions/campaigns for other businesses. The views and opinions expressed in this article are strictly those of its authors and were not written by Phvntom. This article was originally published by Marketing Week.