SMEs might not carry the kudos of a Unilever, P&G or Jaguar Land Rover account but they have proved the powerhouse behind a predicted 5.2% growth in adspend in 2019, which is forecast to have topped £24.8bn for the year.
So says the latest Advertising Association/Warc Expenditure Report which paints an even brighter picture of the market, albeit up just 0.2 percentage points, from its October forecast.
Data-driven channels continue to grab the lion’s share of spend, of course, with search up 12.1% to £7.46bn, digital out of home up 14% and TV video-on-demand up 19.1%; mainstream TV remains stagnant.
Even cinema (up 24.6%) put in an impressive performance, fuelled by the rise of audience profiling tools, although it seems this might be short lived with the study predicting the medium will decline by 6.3% in 2020.
Data-driven radio has already been turned down, however, with the projected growth in online radio slashed from 20.4% to 14.7%, bringing down overall radio from 2.7% growth to 0.6%. Meanwhile, mailshot spend will fall 9.2% in 2019 but only 5.2% this year.
This forecast backs a PwC report for Royal Mail which predicted the decline in direct mail would start to slow in 2020, driven by the perceived ongoing value of direct mail as a marketing channel, supported by both interview and business survey feedback. PwC predicted that initiatives such as Jicmail and Partially Addressed Mail would also benefit the market.
According to the AA/Warc study, 2020 will see the overall market grow by another 5.2% to £26.1bn.
Advertising Association chief executive Stephen Woodford said: “These media spend figures are particularly impressive given this was a period of Brexit and political uncertainty and very low overall economic growth.
“This is in part fuelled by the exceptional growth in SME spend in digital, as well as larger advertisers continuing to move budgets into digital formats in most media sectors. The projected growth for 2020 shows these trends continuing. Industry’s focus now turns to the future relationship with the EU and the importance of this to the overall health of the economy, which underpins this media spend growth.”
Warc data editor James McDonald added: “Online formats account for three in five pounds spent on advertising in the UK, and we expect this to rise to two in three by mid-2021, fuelling total market growth in tow.”
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