Investments in the UK advertising industry will be worth over £18.8bn in 2017, with the sector set to enjoy its eighth successive year of growth.
Media investment management business GroupM has released its forecast for the year ahead in advertising, and predicted that the industry will grow up from 6.3% to 7.2% in 2016, and 7.2% in 2017.
While digital display will rise 15% next year, particularly into social media and video, GroupM’s outlook for traditional media is set to decline slightly.
We are advising careful consideration in balancing investments to ensure support of long-term brand growth,
The UK is set to remain one of the world’s most digital-centric advertising markets, and the largest driver of digital display is paid search, which is also acceleration.
Digital is also getting a boost from the rise in automation, geo-targeting capabilities and point-of-sale immediacy of mobile for performance-minded advertising.
Interestingly, GroupM’s analysis of the aggregate digital advertising investment it manages for UK clients includes paid search – which differs from the IAB’s analysis.
GroupM now invests nearly the same amount in digital advertising as in TV and half of GroupM’s digital investment is automated, up from 40% in a year.
TV advertising
The group identified five categories as being important for TV, comprising a third of UK TV advertising investment (£1.5bn).
These include:
- Cosmetics and personal care
- Food
- Retail
- Household equipment and DIY
- Leisure equipment
In contrast, pure-play online advertising is nearing £10bn, and it is predicted that pure play digital vendors will target these categories more aggressively in future.
As within many industries, there was some uncertainty about how Brexit would affect the UK advertising industry. To GroupM’s surprise, according to Adam Smith, futures director, growth is up and the short-term impact was negligible.
“The main driver that we have seen is paid search accelerating again. It benefits from rising automation and the immediacy needed for mobile and performance-minded advertising. We expect digital display advertising to continue growing by 18% in 2016 and 15% in 2017.
“The ambition of pure play digital vendors to conquer TV territory and categories will be hard-won, but today’s undisputed winner is pure-play digital.”
According to GroupM’s CEO Nick Theakstone, data, and tech resources to efficiently carry out digital campaigns are becoming increasingly important, but it’s also vital that ‘top of the funnel’ marketing activities to create brand awareness are not abandoned.
“We are advising careful consideration in balancing investments to ensure support of long-term brand growth,” he said.
