VOD surges as UK ad-spend grows at fastest rate since 2010
| 28 October 2014
The commercialisation of the UK's video-on-demand (VOD) industry over 2014, and that of TV ads in general, is motoring at a great pace and the rise will continue through 2015 according to a survey from the UK's Advertising Association and Warc.
NOW TV YouTubeIndeed the survey as a whole shows that UK advertising spend grew at its fastest rate for three years in Q2 2014 with year-on-year growth of 8.5%, enabling it to reach £4.515 billion for the quarter. This was the highest level since the third quarter of 2010. Moreover, across the first half of 2014 total UK ad-spend rose 6.3% year-on-year, leading to an upward revision to the full year forecast to 6.4%, and 6.5% for 2015.
Second-quarter growth was boosted by double-digit growth for TV, radio and Internet and coincided with GfK's UK Consumer Confidence Index moving back into positive territory at the end of June. The date showed that TV spot advertising recorded a significant rise of 10.7% year-on-year to £1.118 billion in the second quarter, boosted by the football World Cup in Brazil. Even though growth for the first six months stood at 8.3%, it is expected to diminish in the second half of the year. An overall an increase of 6.7% is predicted for 2014. TV as a whole raked in £4.642 billion in revenue in 2013, £4.233 billion attributable to spot advertising and £126 million to broadcasters' VOD services. Spot advertising is projected to show a 6.7% uptick by the end of 2014 with VOD soaring by 27%. For 2015, this is calculated to be 5.2% and 31.3% respectively leading to an overall 6.6% rise in revenues, compared with 7.8% for 2014.
"Growth at twice the rate of UK GDP is quite a headline, but the real story is of digital and creative leadership in e-commerce," commented Tim Lefroy, chief executive at the Advertising Association. "As the Eurozone wobbles, it's a reminder that our consumer economy is central to the UK's economic narrative."