Sir Martin Sorrell’s advertising group, WPP, has called an end to the Brexit shock that has hammered the ad market since the EU referendum vote in June and upgraded its forecast for the industry.
The world’s largest marketing services company, which manages more than $100bn (£79bn) a year in advertising spend through its Group M media arm, said it was surprised to be upping its forecasts for ad spending in 2016 and 2017, describing the short-term impact of the Brexit vote as negligible.
Group M is upgrading its original forecast of 6.3% growth to 7.2% this year, and from 5.8% to 7.2% for next year, which would make the total UK market worth £18.8bn.
However, this growth is being almost totally fuelled by spending on digital advertising, with “pure-play digital” companies such as Google and Facebook hoovering up the lion’s share.
The report continues to highlight tough market conditions for traditional media owners such as TV companies and newspaper and magazine publishers.
Group M has moved to downgrade its forecast for traditional media spending from -1.1% to -2.6% this year and from 0.5% growth to -1.4% in 2017.
Even factoring in digital ad income, the national newspaper ad market is expected to contract by 12% this year and another 9% next year.