UK ad spend is expected to exceed £10 billion over the festive season this year, according to the latest forecast from the Advertising Association (AA) and WARC. The research anticipates ad spend to reach £10.5 billion during Q4, known as the Golden Quarter for consumer spending, representing a 7.8 percent increase on Q4 2023.
In terms of high-growth channels, online display (+15.8 percent), search (+8.8 percent), and out-of-home (+8.1 percent) are expected to see the biggest boosts compared to the same period last year. Cinema is also on track for a 5.1 percent increase, with Paddington in Peru, Wicked and Gladiator 2 poised as major seasonal releases.
But ad spend on TV is set to fall by 4.3 percent YoY, continuing linear TV’s steady decline during a quarter associated with high levels of viewing. However, spend on BVOD channels continues to climb (+7.8 percent), reflecting the shift in consumption towards broadcaster’s streaming services.
“The final quarter of the year is a critical one for businesses, large and small, to promote their wares in a battle for customer attention,” said Matt Bourn, Director of Communications at the Advertising Association. “The investment we see here in this Christmas advertising spend is an investment in growth which supports jobs up and down the country. As ever, we will see the very best of advertising with all the creative flair that the UK advertising industry can bring to help businesses secure fame and success.”
Marking the calendar
The increase continues 15 years of rising ad spend for a quarter that has grown steadily since the 2009 financial crisis – with the exception of Q4 2022, when the UK ad market fell into recession. The quarter suffered unfavourable comparisons from Q4 2021, when the country was emerging from lockdown and advertiser demand for TV was unusally high, which raised prices and grew TV ad spend by 15.2 percent YoY.
But while TV viewing is increasingly shifting to streaming services, research from Kantar suggests consumers are fonder of Christmas ads than ever. The research firm found that 59 percent of people “love” Christmas TV ads, up from 51 percent in 2023. Meanwhile 56 percent said they are looking forward to seeing Christmas ads on TV, up from 48 percent last year.
AA and WARC noted that the mainstays of the UK Christmas TV calendar are releasing “blockbuster” ads again this year, including John Lewis, Marks & Spencer and Boots, alongside global brands such as Amazon, Disney and Coca-Cola.
“Brands know that a well-crafted Christmas campaign can boost salience, anchor loyalty and drive impressive sales results to boot,” said James McDonald, Director of Data, Intelligence & Forecasting at WARC. “It’s the time of year when media budgets swell, and creative teams pull out all the stops to deliver memorable messaging that resonates well beyond Boxing Day. While the Golden Quarter typically attracts elevated levels of advertiser investment for these reasons, the anticipated £760 million rise in spend this year would be the largest increase on record if the post-pandemic recovery year of 2021 were excluded, with a total above £10.5 billion yet another zenith for the UK’s market.”
