UK advertising spend to recover slower than expected in 2021

Anne Freer | November 2, 2020

Mobile Advertising

It seems unlikely now that advertising spending in the UK will recover in 2021 given the economy impact of the COVID pandemic.

Total ad spend is predicted to drop by 14.5% in 2020 to £21.5 billion. That’s a loss of £3.6 billion over 2019, according to the latest report from WARC and the Advertising Association.

Even the Christmas quarter is taking a hit at a 10.5% drop or £724 million.

The second quarter of the year marked the worst one on record at a loss of 33.8%.

“These stark figures demonstrate the strain that all parts of the advertising ecosystem were under during the second quarter. Large parts of our industry and the wider economy were effectively shut down”, said Stephen Woodford, chief executive of the Advertising Association.

“Events of recent weeks have shown this will be no straight-forward recovery as different parts of our country enter or leave local conditions at varying speeds. We must boost growth and support jobs through an advertising tax credit and a skills programme to aid colleagues facing unemployment. It is essential that our workforce, business, and Government work together on the recovery plan for our industry and our country.”

There’s optimism for certain ad sectors like mobile and digital where brands are making a better return to spending.

“We largely expected the report’s findings that the digital advertising industry wouldn’t recover until 2022 as a result of the pandemic. Despite this, we are encouraged to see a potential return to growth in the New Year which should provide some exciting opportunities for advertisers,” added Matthew Goldhill, CEO at Picnic.

“It is reassuring to see media channels like out of home predicted to perform well year-on-year and this is underpinned by strong growth in their online formats. To build on the growth of digital media, brands must continue investment in more creative formats like video and mobile to engage consumers. These premium ad formats can help create more meaningful experiences for consumers who are now spending more time on their devices than ever before. Advertisers should take risks with their media and look at developing more innovative campaigns to take advantage of 2021’s predicted return to growth.”

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