Data-driven online marketing channels were once again the driving force behind the UK advertising market in the first quarter of 2019, with budgets rising 4.2% year-on-year to reach £6bn, marking the 23rd consecutive quarter of market growth.
So says the latest Advertising Association/Warc Expenditure Report which covers the three-month period leading up to the original scheduled Brexit date of March 29, 2019.
The figures highlight growth coming from areas including search, online display, TV VOD, online radio, out-of-home and cinema. The report forecasts growth to £24.6bn for 2019, equivalent to a 4.6% increase, with the UK’s ad market expected to grow a further 5.3% in 2020.
Data-fuelled online channels continued to outperform the rest of the market, with Internet radio seeing standout year-on-year growth of 26.5% in the first quarter. TV VOD achieved an increase of 17.5% in the same period, while total online display saw an increase of 16.6%. Digital out of home also experienced a good first quarter with growth of 10.9%.
The report points out that the figures reflect the recent Advertising Pays 7 report from UK advertising’s think tank, Credos, which demonstrated how Britain is the largest online advertising marketplace in Europe and that the UK has the highest per capita online spend in the G20, boosting businesses up and down the country.
Across traditional formats, cinema was up 12.3% compared to the same period last year. Growth is forecast for 2019 across the majority of formats, with the greatest increases predicted in online radio and TV VOD. Direct mail has yet to recover, however.
Advertising Association chief executive Stephen Woodford said the figures are testament to the resilience of UK advertising during an uncertain period for business, leading up to the original Brexit date.
He added: “We see online advertising in all its forms continuing to perform strongly, demonstrating again how the UK is Europe’s leading online advertising marketplace.
“We hope that the new administration [under Boris Johnson] can deliver a business-friendly outcome to our relationship with the EU, ensuring the UK’s domestic advertising market remains robust and our advertising exports, which are world-class, keep growing.”
Ozone Project chief executive Damon Reeve said that while it is “encouraging” to see the industry continuing to grow in the face of uncertainty, digital growth continues to be dominated by the big tech players, with publishers and premium content creators having to fight hard to earn their share.
He added: “In this era of unprecedented content creation, the importance of advertising in trusted, brand-safe environments is becoming a number one priority and premium, trusted publishers can offer this to help brands reach engaged audiences at scale.
“The strong forecasted growth (12.8%) for online in 2019 is positive, but publishers will need to come together to demonstrate the power of their engaged audiences, premium content and trustworthy environments to successfully compete and capture that growth.”
Woodford’s call for a business-friendly outcome follows a stark warning from the CBI, which yesterday (July 29) claimed that the UK’s £240bn data industry is at significant risk from a no deal Brexit. The bosses union warned that burgeoning legal costs, interrupted data flows and reduced investment in data centres would begin on “day one” – November 1.
A no-deal would also hammer online businesses in the UK. Those without an office in the EU but offering goods and services to, or monitoring the behaviour of, EU individuals will need to appoint an EU representative responsible for GDPR compliance and a point of contact for European citizens.
Meanwhile, companies in the UK handling the personal data of EU consumers will be forced to introduce additional clauses into data transfer agreements.
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