UK adspend rose by 28.3% year on year, reaching a total of £8.6bn in the first three months of 2022, the latest Advertising Association and Warc expenditure report has revealed.
This means that adspend is expected to hit £35.4bn in 2022, equating to 10.9% growth on 2021.
These figures are in line with the increase in online advertising, which is forecast to account for 74.3% of spend this year, in comparison with 2021’s 73.5% of spend. In this Q1, online advertising made up 74.9% of adspend.
Despite the cost of living crisis, the data gathered by the AA suggests that the UK’s ad market will grow by 4.4% in 2023, reaching a value of £37bn.
This is, however, a downgrade of one percentage point on AA/Warc’s April forecast, when growth was forecast at an additional 5.4% year on year and expected to reach £37.2bn.
James McDonald, director of data, intelligence and forecasting at Warc, said: “The latest survey data shows that the UK’s ad market is currently experiencing a soft landing from the turmoil caused by the Covid outbreak, with early budget commitments translating into a strong start to the year for the industry.”
McDonald did warn, however, that “higher costs will carve into margins” and that the market will contract because of these “inflationary pressures”.
All media reported growth in Q1, but out-of-home advertising recorded triple-digit growth, with a 146.2% increase in adspend. In 2022 overall, out of home is expected to increase by 28.9%.
Barry Cupples, group chief executive of Talon Outdoor, said: "These latest figures demonstrate that the out-of-home advertising sector is growing from strength to strength.
“Through the power of programmatic and data-driven insights, OOH has transformed into a high impact, tightly targeted and accountable way for brands to influence audience behaviour and its impact is consistently developing, so that brands can reach the audiences that matter.”
It is cinema, however, that is expected to experience the biggest year-on-year growth for 2022, with a 191.2% increase.
Stephen Woodford, chief executive of the AA, said: “It is encouraging to see growth in our industry over Q1, as the economy continues its recovery year on year following last year’s Covid-19 lockdown.”
He also said that “the pressure of inflation on living standards” was at the forefront of people’s minds and added: “As the UK’s political leadership changes, it is important to recognise the value that advertising brings to the economy in supporting competition, innovation and growth at this critical time.”