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One step back, two steps forward for U.K ad spend

May 28th 2015

After an outstanding first quarter that saw U.K ad spend grow by 7.3%, the absence of marketing dollars flowing around last year’s Football World Cup has manifested itself in a soft market this April.

Ad spend throughout the final weeks of the U.K general electoral campaign was unable to beat the pull felt by brands to invest in the world’s most-followed sporting event and the market dropped by 8.1% for the month. However, against the backdrop of a gloomy month, the overall ad market has actually risen more than 3.4% in the calendar year-to-date.

The market’s growth so far this year can be attributed to the tremendous health of two of major media sectors. Digital has grown a healthy 9.8% CYTD, followed closely by television (8.2%) in a symbol of their ability to co-exist and thrive.

The TV and digital results indicate that while brands are increasingly looking to the digital media ecosystem to deliver granular and targeted campaigns, they are also showing that they still trust in the power of television to provide mass reach.

That both TV and digital are growing at a steady pace, of course, comes at the expense of other media – and print is paying the highest price. The newspaper and magazine ad business have both shed revenue in the year to April, dropping 19.1% and 17.2% respectively.

In other sectors, out-of-home advertising has remained relatively flat (1%) and radio advertisers have also reined in their spending by 2.7%. While each market failed to grow, the results show that brands haven’t given up on out-of-home and radio’s ability to build loyalty among their respective market niches.

Looking ahead, the declines in April are expected to continue into this quarter, although, the U.K can look towards a healthier second half of the year when ad budgets around another major sporting event will fuel the market. The lure of the 2015 Rugby World Cup, hosted on home turf in England and Wales, will no doubt be attractive to domestic advertisers in September who want to attach themselves to the major international event.

The World Cup, coupled with improved economic conditions, solid employment rates and weightier consumer pockets, will hopefully bolster the market for the final quarter of the year when brands also look to maximize the Christmas season.

We’ll be watching closely to see the knock-on effect of those much-anticipated market conditions, which will hopefully boost annual ad spend to healthy single-digit growth to close out the year.

SMI Team

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