Returns to growth in TV and out-of-home media spending will drive a substantial bounceback in the UK’s advertising market during the spring months – a year on from last year’s collapse as the pandemic took hold.
However, buyers from the UK’s biggest media agencies have given Campaign a wide range of forecasts for how big the market's return to growth will be.
Estimates range between 20% and 70% for the second quarter of 2021, with views differing over how strongly spend will return to offline media channels as the economy recovers.
This comes after the market shrunk by 45% in April and May 2020, with June only slightly less severe by being down 32% last year, according to Interpublic Group figures.
Dan Clays, chief executive of Omnicom Media Group UK, said most clients had been encouraged by the government’s timetable for easing social distancing measures, with travel among the categories that are “slowly returning to activity”.
He said: “Many brands have already adapted and enhanced their ability to supply and fulfil customers – from ecommerce to product diversification – which has enabled a continuation of spend compared to the first lockdown.
“More specifically, with Euro 2021 looking more likely with some fans in attendance and Love Island now being confirmed [on ITV], these are important tent pole media opportunities that will attract spend. The planned reopening of cinemas in May, if targets ?are met, is very welcome.”
TV returns to growth but picture is hazier
The buyers that spoke to Campaign were generally agreed that substantial year-on-year increases in television and OOH media spend would fuel the upcoming quarter’s growth. Print and radio will not see massive shifts in growth next quarter, buyers said. Newspapers and radio had a difficult period when the lockdown hit last year, but were also beneficiaries from the government's spend on public health messaging.
A source close to one of the UK’s major TV broadcasters, meanwhile, told Campaign it was expecting growth in TV spend of around 70% year-on-year between April and June. This morning, ITV confirmed that it expected its ad revenue to be up by between 60% and 75%, compared with being 6% down for the first three months of 2021.
"We're not just talking about airtime, but partnerships [sponsorship] and video-on-demand, too. It's very buoyant indeed," the source added.
After the market went down by more than 50% in April and May last year, the source said this 70% level of growth would take the market back to where it was in the second quarter of 2019.
However, media buyers were slightly more conservative about TV’s performance next quarter, with growth estimates ranging from 55% to 65%.
Bobby Din, investment partner at Goodstuff Communications, noted that “the floodgates haven’t opened” as much as the indie media agency thought it would, while forecasting has become difficult due to shorter-term decisions being made around TV buying and ongoing uncertainty among advertisers about how smoothly the easing of lockdowns will be.
“Ultimately, our clients have wanted dates, not data,” Din said. “Now we have dates [from the government’s roadmap], we’re seeing more of a recovery in the second half of 2021 than the second quarter.”
He added: “We expected a bit more in April, given that we have Easter and the opening up of [non-essential] retail. But we’re still talking to clients now, they know they can make later decisions about going on TV, so there could be more [Q2] money to come in over the next couple of weeks.”
Caution persists over positive mood
But Richard Oliver, UK head of Magna Global, Interpublic Group’s media-buying arm, suggested the total market would grow by 20% this year. He noted that June in particular would be a strong month because of advertising around the postponed Euro 2020 football tournament, especially if the UK fully reopens as planned on 21 June.
Oliver added: “The digital market, which is obviously the biggest player, really didn’t take that much of a hit last year. In normal times being up 20% would be an astonishing figure.”
Steven Ballinger, UK president of Dentsu’s buying division Amplifi, forecast the market would be up 36% year on year in the second quarter, with OOH up 300% and cinema up 2,000% from very low bases during the same period in 2020.
“We are expecting strong growth off the back of the significant declines in Q2 2020, a clear roadmap out of lockdown and the vaccination programme going well,” Ballinger added, noting that TV would be up 50% over this period. Amplifi is also forecasting that 2021 is expected to be up by 10% year-on-year.
Group M, meanwhile, believes the total market will be up about 55% next quarter, and agreed increases in TV and OOH would drive this, accrding to trading director Jonathan Masterson.
While pure-play digital advertising was also impacted by the economic shock of the pandemic last year, it remained resilient as many advertisers shifted spend into ecommerce and held steady on search spend. Group M’s latest forecast for 2020 says the market was down by 4% over the year, with TV down 10% to £3.8bn, OOH down 45% to £577m and pure-play digital up 5% to £14.5bn.
Notably, MediaCom, the UK’s biggest media buyer and Group M agency, is predicting a more sanguine 70% growth in Q2. Another major network buyer that declined to be named also told Campaign it expected 70% growth next quarter.
James MacKenzie, chief investment officer at MediaCom, said: “We see movement in these numbers – the closer we get to roadmap dates, the more confidence we get, peaking in May… But underlying this is caution – if there’s a second wave or new variant and things close again, it’s going to put a dampener on everything.”