With a forecast that UK adspend will leap 13% to a new high of £24.2bn this year, media buyer Group M is advising marketers not to “wait and see” as the country prepares to emerge from lockdown.
It predicts that TV advertising in particular will evidence a bottleneck effect in Q2 and Q3 due to the release of deferred (as opposed to cancelled) spend from previous quarters.
“After several perceived missteps, the UK’s outperformance on vaccinations has imbued the country with a sense of hope,” reads the report, which is authored by Group M’s global president of business intelligence Brian Wieser.
"We suspect that many marketers are behaving defensively and waiting to see what others do before reacting. We would advise against this.”
The report predicts TV adspend (including digital extensions) this year will rise 11% from 2020 to £4.33bn and chimes with the expectation of a booming Q2 expressed in Campaign’s recent examination of the TV market.
While the report predicts strong growth in all media this year, there is a wide variety in the base each is starting from and how long that growth will endure.
Outdoor advertising, for example, may see 31% growth this year but that is relative to a catastrophic 2020. It is not expected to surpass its pre-pandemic size until 2023.
The picture is bleaker for newsbrands (again including digital extensions), which are predicted to enjoy 14.6% growth this year but then fall back, to the extent that in 2024 the adspend they attract will be half the level it was in 2016. It is a similar, actually worse, scenario for magazines.
Group M remains highly bullish on the future of internet adspend after a strong 2020, tipping it to account for a whopping 69% of the UK total this year on the back of slightly higher growth than TV.
It expects this growth to endure in future out to 2024, taking the medium to double the size it was in 2017, in part due to a theory about the type of companies expected to grow out of the pandemic.
It comments: “Data from the ONS suggests double-digit annual growth in new business formation since June 2020. With low barriers to entry and suitedness to performance goals, digital advertising has been a beneficiary here, as small business advertisers continue to shift resources online to capitalise upon a social contact restricted context.
“Another related observation is that to the extent that a business formed today has a higher propensity to spend on digital advertising than a business formed in the past, we would expect a growth in the number of small businesses to have a positive impact on the digital advertising market.”