Total TV ad expenditure is forecast to grow by 5.3 percent this year, according to the latest Expenditure Report from the Advertising Association and WARC released today. A good portion of this growth will come from advertising on TV streaming apps, with video on-demand (VOD) ad revenues specifically expected to grow by 13.7 percent.
What’s particularly interesting about these figures is that TV ad revenues have already more than fully recovered from the 2020 decline, meaning this growth is not just a bounce back from the pandemic. Total UK TV ad spend fell by 11.8 percent in 2020 according to previous data from the AA and WARC, dropping from $4.93 billion to £4.35 billion. But the latest expenditure report, which doesn’t yet include solid data from Q4 2021, forecasts that total growth last year reached 26.1 percent – which would take total expenditure to £5.48 billion, far above 2019 levels.
The continued fast growth of VOD spend is impressive at a glance, but also does seem to resemble a slowdown in growth rate. Ad spend for VOD actually grew by 15.7 percent in 2020 despite the pandemic according to the AA and WARC, and today’s report forecasts that growth reached 37.5 percent last year. The fact therefore that growth this year is actually expected to be lower than 2020 may resemble something of a levelling out for VOD revenues.
Feeding the AA and WARC’s numbers through from last finds that while VOD spend is growing quickly, as a proportion of total TV spend growth is quite slow. VOD ad expenditure accounted for 12 percent of total TV in 2020, and is forecast to account for 13 percent in 2021, and 14 percent in 2022.
Strongest year in ad market history
Outside of TV, total UK ad spend is expected to reach almost £30 billion in 2021, its highest ever level. Ad expenditure is expected to rise by a further 8.5 percent next year, taking total spend above £32 billion.
Last year’s forecasted growth rate of 26.4 percent is the highest of any major international market according to WARC, outpacing the US, China, and France among others. And in 2022’s the UK’s strong performance is expected to continue into 2022.
This year out-of-home and cinema, two of the media channels most directly affected by the pandemic, are expected to see the highest growth rates.
On the other end of the spectrum, magazine brands and regional news brands are expected to see falling total ad revenues this year. Ad expenditure on magazine brands is predicted to fall by 3.0 percent this year, with even online revenues down by 1.0 percent. Expenditure on regional news brands meanwhile is expected to fall by 6.1 percent, though online revenues will be up by 0.9 percent.
