WPP’s media buying arm GroupM says that the recovery of the UK’s ad market is “far exceeding previous expectations”, leading the agency group to bump up its expectations for the years ahead in its latest ‘This Year, Next Year’ report. GroupM now expects TV ad spend in the UK to be up 13.0 percent this year. This represents a complete recovery from the pandemic, with TV ad spend in 2021 expected to be 0.8 percent higher this year than it was in 2019.
This growth is forecasted to continue into 2022, when GroupM expects further 3.1 percent year-on-year growth. After this however, GroupM predicts a steady annual decline in TV ad revenues, as budgets shift away from TV.
More broadly, GroupM forecasts that total UK ad spend will grow by a massive 24.3 percent this year, representing 21.2 percent growth compared with 2019. Pure-play internet advertising is expected to be the biggest driver of growth this year, up 27.3 percent year-on-year, with e-commerce advertising specifically predicted to grow by 101.7 percent.
“Since our last forecast in March, the U.K. advertising market’s recovery has continued to gather pace. Our most recent forecast confirms that the advertising market is undergoing a period of secular growth not seen in recent times,” said Brian Wieser, GroupM’s global president of business intelligence. “While the economy continues to recover strongly after the havoc wrought by the pandemic, the pace of advertising revenue growth is still impressive.”
Wieser said that the success of the UK’s vaccine programme, and what appears to be relatively limited business disruption from Brexit so far, are both restoring advertiser confidence. At the same time, we are currently seeing “the highest levels of real household disposable income in post-war Britain”.
For television specifically, GroupM says the return of advertisers in the travel, non-essential retail and automotive categories are driving growth. Plus, this summer’s UEFA European Championships and Olympic Games are expected to tempt in advertisers.
But while there are a number of factors blowing in TV’s direction, there are big headwinds too.
For a start, in the short term, broadcasters will likely have to continue to be flexible in order to keep attracting advertisers. As VideoWeek reported last year, broadcasters became much more flexible during the depths of the pandemic in order to cater to advertisers’ needs, but brands will want broadcasters to keep this flexibility in the post-pandemic world.
“Brand count, copy regulations and media owners’ requirement to fulfil quality metrics mean it is unlikely that advertisers will ever be able to book linear TV with as little notice as a digital campaign, but all major broadcasters have reduced AB terms and are looking to work with the industry to evolve,” said Wieser. “Now, the biggest barrier preventing flexibility is quality delivery across the schedule.”
But there bigger speedbumps further down the line. Increased competition from global streaming platforms is an obvious one. Another is the UK’s upcoming ban on advertising for foods high in fat, salt, and sugar (HFSS), which will prevent these foods from running ads on TV before a 9pm watershed.