GroupM reports sharp recovery in UK ad spending growth – expected 7% YoY 2013

groupmAdvertising spending in measured media in the U.K. is expected to show a 7.0 percent increase this year, double the rate GroupM predicted only six months ago and comfortably leading the world’s larger mature economies.

The report, “This Year, Next Year UK” predicts measured ad spending in the U.K. will reach a total of £13.9 billion ($22.5 billion) in 2013, up from £13.0 billion ($21.0 billion) in 2012 and eclipsing the previous peak of £13.1 billion in 2007.

The study, released today by GroupM Futures Director Adam Smith, also predicted that U.K. ad spending in 2014 will increase 6.0 percent to £14.8 billion ($23.8 billion).

“This ad recovery is spectacular, but not a phenomenon,” Smith said in releasing the report. “U.K. annual GDP is likely to have risen 9 percent in cash terms since 2008, and annual advertising the same. The question is whether advertisers sustain their optimism that U.K. households are feeling richer, and might actually get richer, between now and the election expected in spring 2015.”

According to the report, digital spending including paid search will reach £6.1 billion ($9.9 billion) in 2013, a 17 percent increase from 2012. The figure represents an increase in digital’s share of measured ad investment to 44 percent in 2013, from 40 percent in 2012.

Smith added: “U.K. paid search has doubled in size since 2008 in cash terms and as a share of all U.K. marketing investment. Smartphones, tablets and e-commerce sustain this momentum. We think mobile (including tablets) will furnish 70 percent of paid search investment growth this year and all of it next year.”

GroupM expects digital display advertising to grow 17 percent in 2013, with continued demand for video and social inventory in particular. Automated or “programmatic” buying of digital display inventory is now routine for many advertisers, and their rising appetite will be a theme for 2014.WPP

TV advertising is predicted to grow 6.8 percent in 2013, in line with the accelerated market average. Recovery has slowed the loss of ad investment into physical newspapers and magazines to single digits, though pressure to innovate across all print assets remains relentless.

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