UK Ad Spending Up +5% to Kick Off Year, Despite Soft TV Market
New York, 17th Jun 2015 – Digital and out-of-home media were the key drivers of growth within the advertising sector in May, boosting the total market by 2%, according to Standard Media Index’s (SMI) data released today.
Digital’s growth, which leapt +24% in May on a year-on-year basis, continues to keep the ad market in positive territory. Digital ad types across the board delivered healthy double-digit gains, with social media sites jumping by close to 60% and almost half of the digital spend bought programmatically. Digital’s share has expanded by five percentage points to 30% of all spend in the calendar year-to–date.
SMI’s data also shows that out-of-home ad spending bucked recent trends and grew by 8% in May on a YOY basis.
2014 UK AD MARKET HIGHLIGHTS
Television showed growth in all four quarters of 2014 to increase by+5.3%, despite a slight deceleration in the final quarter of the year (+3.0%). Subscription TV (+8.9%) performed significantly better than free to air (+4%) in 2014, and the differences were even larger in Q4 (+9.1% vs +0.9%). The TV sector’s winner was ITV, which holds 43% of the ad spend share, and grew +9.9% YoY in 2014. It was followed by Channel 4 at +3.9%, and Sky, which increased by +6.4%.
After showing single-digit growth figures in Q3 for the first time in years, digital ended 2014 with a +16.1% upswing in Q4. It increased +15.5% YoY in 2014.
Within digital, investment in social media advertising grew by +38.4% in 2014, video increased by +34.8% and mobile gained +22%. Direct display advertising declined slightly by-2.3% due to an increasing portion of display advertising being bought programmatically. Programmatic grew +65.4% this year and +67.1% in the final quarter.
Twitter’s ad revenue in the UK grew by +76.9% in 2014, with Google (excluding search) at +34.7%, and Facebook increasing +28.1%. Amazon and Expedia saw their advertising revenue grow by +46.3% and +54.8% respectively.
In another challenging year for the print market, newspapers declined -8.1% in 2014, whereas magazines dropped -10.2%. The final quarter of the year was especially hard for the print industry, with newspapers and magazines dropping -16.8% and -17.8% respectively.
Within newspapers, the free distribution titles (+2.3% YoY) performed significantly better than paid for press, which lost -11.9% in 2014. The major print media owners in the UK offset the negative impact of declining print advertising budgets by attracting strong investment into their digital portfolios: DMG Media (+28.1%), Telegraph Media Group (+18.3%), The Guardian (+28.4%), Time Inc. UK (+18.9%), Hearst Magazines (+29.7%), and Conde Nast (+23.2%).
Radio recovered well from a slow 2013 and grew +9.1% this year, whereas out of home gained +9.5% and cinema saw zero increase (-0.1%).
BEST AND WORST PERFORMING CATEGORIES IN 2014
Toys and video games manufacturers spent +33.7% more in advertising than they did last year to emerge as the best performing category, followed by gambling and lotteries (+26.4%) and travel, tourism and hospitality (+14.3%).
Alcoholic beverages (-5.3%), consumer electronics (-4.4%) and media (-3.6%) all declined considerably.
SMI captures 80% of total U.S. agency spend exclusively from the booking systems of five of the six global media holding groups, as well as leading independents. It reports monthly on actual spend data and is the clearest picture of the flow of dollars across the sector.