If the estimations prove accurate, 2016 marks the fifth straight year in which UK ad spending has outpaced its gross domestic product growth
The forecast released by GroupM on 30 November 2015 has predicted that UK’s advertising spending in 2015 is anticipated to grow by seven percent. Meanwhile throughout 2016, it expects the demand for digital advertising to see further growth (also seven percent) so that it pushes UK advertising investment above £17 billion.
The research raises the initial 2015 estimate by one point (six to seven percent) whilst raising the 2016 outlook by two points (five to seven percent). If the said estimations prove accurate, the coming year will mark the fifth straight year in which UK ad spending has outpaced the Kingdom’s gross domestic product growth (2012 to 2016).
The fastest growing mature advertising market worldwide while among the world’s fastest-growing markets, GroupM has identified a number of economic factors underpinning its UK predictions. The nation currently enjoys the highest recorded employment rate in its history with 74 percent of the working-aged populace in jobs.
Additionally, workers’ real wages have risen near to their 2008 peak, while consumer-price inflation has not yet similarly risen. Low energy prices and property wealth are additional tailwinds for a very positive outlook on UK consumerism, and as a result, the agency believes UK consumers will be spending more next year.
|Year Over Year Percentage Change|
|Consumer magazine brands||-4.2||-7.4||-6.7|
|B2B magazine brands||-4.5||-6.6||-4.3|
|Media in total||7.0||7.4||7.2|
GroupM’s forecasted distribution of ad investment growth across media formats.
Based on these findings, it is anticipated that UK advertisers will marshal their efforts to seize the opportunity with a strong increase in media investment. With the updated forecast, GroupM has introduced a new category dubbed ‘Pure-Play Internet’ which is digital minus TV and print content repatriated back to its parent media.
The above allows for broadcaster VOD and digital platforms to be considered together with television and likewise for print media to have the benefit of their digital assets when viewing the pace of their contraction. GroupM holds that the view of how ad investment is shifting across categories better supports industry dialogue and trend analysis.
However, while delineating that Pure Play Internet gives legacy media a fairer consideration, the impact is slight on the still rapid growth of the internet category which is estimated to be 13 percent in 2016. The year promises one for the growth of overall media investment as clients tap into the economic trends empowering UK consumerism.
There has been a slight deceleration from 2013 to 2014, but Pure Play Internet will still grow far faster than second-fastest-growing TV –which will realize 7.4 percent growth in 2016. It should be noted that the growth performance of TV is strong in its own right, and the prediction holds for a fractional share gain in 2015 and 2016.
“The influence of digital is everywhere. It suggests that legacy media channels must think and behave like media brands or what could be dubbed audience brands. Digital’s influence is also pulling trading toward a more common GRP basis versus the idiosyncratic variety of the present, creating urgency to discriminate between correlation and causality, and driving demand for better reporting standards,” said Adam Smith, Futures Director of GroupM.