2021 UK Adspend forecast for slower recovery
Published: 30 Oct 2020
Adspend is set to fall by 14.5% this year to £21.5bn as a result of the COVID-19 outbreak, equating to a loss of £3.6bn compared to 2019. The final quarter of this year – traditionally the Golden Quarter for retail and adspend because of the Christmas Advertising season – is set to see a 10.5% drop to a total of £6.2bn, some £724m lower than the previous year.
The latest industry data also show that UK adspend fell by 33.8% in Q2 2020 at the height of the nation’s lockdown. This was the worst ever quarter recorded for the UK’s advertising industry and contributed to a 14.9% dip over the first half of the year, equating to a loss of £2bn when compared to the same period in 2019.
The new data show investment fell across all advertising formats in Q2, with some sectors that were shut down, such as cinema, and those that lost significant amounts of consumer contact, such as out of home and direct mail, seeing significant declines. As the population was encouraged to remain at home, online and digital formats performed relatively less badly than others, though each recorded their first annual falls in advertising investment.
Looking ahead to 2021, cinema adspend is forecast to rise by 138.3% as picture houses reopen and films that have been postponed make it to screens. Other media predicted to perform well year-on-year include out of home (+57.1%), regional newsbrands (+16.2%) and magazine brands (+18.8%), underpinned by strong growth in their online formats.
Stephen Woodford, Chief Executive, Advertising Association commented:
“These stark figures demonstrate the strain that all parts of the advertising ecosystem were under during the second quarter. Large parts of our industry and the wider economy were effectively shut down. Events of recent weeks have shown this will be no straight-forward recovery as different parts of our country enter or leave local conditions at varying speeds. We must boost growth and support jobs through an advertising tax credit and a skills programme to aid colleagues facing unemployment. It is essential that our workforce, business, and Government work together on the recovery plan for our industry and our country.”
James McDonald, Head of Data Content, WARC commented:
“The latest results show that the UK’s advertising industry endured its worst quarter on record during Q2 2020, an unprecedented period in which a national lockdown was imposed in response to the COVID-19 outbreak.
“Advertising trade remains depressed, and the rising likelihood of sustained localised lockdowns over the winter, a disorderly exit from the European Union in December, and a prolonged economic recovery embodied by rising unemployment, now leads us to believe that the industry will not fully recoup this year’s losses until 2022.”
Categories: Industry News