Brands set to splash £10.5bn on festive advertising blitz

Advertisers are expected to spend a record £10.5bn during the festive season, marking a 7.8% increase from last year’s spend of £9.7bn, amid claims that the investment highlights advertising’s vital role in supporting businesses, jobs and the economy during the Christmas period.

So says new data released by the Advertising Association and WARC, which forecasts that spend for the Q4 season will reach record levels, with online media channels expecting to see a boost, including online display (which comprises social media spend) at 15.8%, online radio at 8.8% and broadcaster video on demand (BVOD) at 7.8%.

In towns and high streets, out of home advertising is expected to see an 8.1% rise in spend and cinema is up 5.1%, in line with the new movie releases of Paddington in Peru, Wicked and Gladiator 2.

The forecast follows recent research from Kantar which reveals positive sentiment towards Christmas ads is at the highest level since measurement began, with 59% of people saying they ‘love’ Christmas TV ads, up from 51% in 2023. While 48% of consumers last year were ‘really looking forward to seeing Christmas ads on TV’, this figure has now lifted to 56%.

Kantar head of creative excellence Lynne Deason commented: “Advertisers really raised the bar last year, and the festive fervour we’re seeing now reflects that. When it comes to anticipating this year’s campaigns, John Lewis remains the powerhouse with one in four people saying it’s the ad that they are most excited to watch.

“Last Christmas there was a ramp up in humorous campaigns, a great way to make content stick in our minds. Gone are the days when all brands try to beat John Lewis at their own game with an emotional rollercoaster. There are so many creative ways to entertain people with advertising and that’s what people love so much at this time of year– storytelling, music, humour, celebrities etc – combined with the joy and meaning of the Christmas spirit.”

Many of the UK’s biggest brands, including John Lewis, Tesco, Sainsbury’s, Waitrose, Marks & Spencer and Boots are releasing blockbuster Christmas ads again this year, alongside global brands such as Amazon, Disney and Coca-Cola.

In 2023, campaigns by Aldi, featuring Kevin the Carrot, and Coca-Cola were broadly recognised as the most effective advertising work of the festive season.

Meanwhile, earlier this month, an analysis by the Institute of Practitioners in Advertising of the winners of its Effectiveness Awards highlighted three consistent ingredients for Christmas advertising success – fame, emotion and TV – to deliver a greater market share for advertisers.

Advertising Association director of communications Matt Bourn said: “The final quarter of the year is a critical one for businesses, large and small, to promote their wares in a battle for customer attention. The investment we see here in this Christmas advertising spend is an investment in growth which supports jobs up and down the country. As ever, we will see the very best of advertising with all the creative flair that the UK advertising industry can bring to help businesses secure fame and success.”

WARC director of data, intelligence and forecasting James McDonald concluded: “Brands know that a well-crafted Christmas campaign can boost salience, anchor loyalty and drive impressive sales results to boot. It’s the time of year when media budgets swell, and creative teams pull out all the stops to deliver memorable messaging that resonates well beyond Boxing Day.

“While the Golden Quarter typically attracts elevated levels of advertiser investment for these reasons, the anticipated £760m rise in spend this year would be the largest increase on record if the post-pandemic recovery year of 2021 were excluded, with a total above £10.5bn yet another zenith for the UK’s market.”