Strong Q1, improving economy, World Cup drive UK ad market

Joseph O'Halloran

Robust performances for TV in the first quarter of the year and an improving economic outlook have led the UK's Advertising Association to revise its forecasts upwards.

Indeed the latest AA/Warc Expenditure Report claimed to be the definitive measure of advertising activity in the UK predicts that total growth rates will reach 6% in 2014 and 6.7% in 2015. In addition, total UK advertising expenditure was found to have increased 5.0% in Q1 2014 to reach 4.441 billion, ahead of the 4.5% growth predicted in April 2014.

The association also calculated that spot TV advertising saw a revenue increase of 6.0% in Q1 to reach 1.100 billion and believes that his figure will likely accelerate to 10.5% growth in Q2 as TV enjoys a significant boost from the World Cup. However, it cautions that the rate of increase should ease in the third quarter, reflecting the impact of budgets brought forward specifically for the tournament. Overall, 2014 is expected to deliver a 6.5% increase compared with 2013.

Video-on-demand (VOD) revenues are also expected to show strong growth. The data reveals that in 2013 broadcaster VOD revenues were worth 126 million, up 21%. By the end of 2014 this is forecast to grow by 27%, and by 31.3% in 2015.

"These latest ad-spend data are another nudge up for the economy, and a feather in the cap of UK global leadership in online and mobile, with consumers getting more value each day," commented Advertising Association chief executive Tim Lefroy.