According to data from the the AA/Warc Expenditure Report, UK advertising posted a stronger than expected performance in the second quarter of 2012. Spend increased by 3.8% year-on-year (excluding direct mail), exceeding earlier forecasts by 0.9 percentage points. Total advertising spend for the same period was £4.2bn (including direct mail). Growth in Q2 2012 was driven by the Jubilee and Euro 2012, as well as some advertisers moving budgets forward from Q3 in light of the Olympics.
Cinema enjoyed the biggest Q2 increase, leading internet, radio, television and out of home, which enjoyed a pre-Olympics boost of 9.9%, beating out the internet for the greatest Q2 2012 lift compared to the same quarter in 2011. Cinema ad spending was up 24%, while overall advertising was up 3.8% (excluding direct mail). Print was down by nearly 12% over the same quarter in 2011.
UK Ad Spending Growth (Q2, 2012; % Change vs. Same Q Prior Year; Forecast)
% Q Change
Forecast 2012 Y-O-Y
Source: Advertising Association/Warc, October 2012
Tim Lefroy, Chief Executive at the Advertising Association, says “... advertising continues to enjoy solid growth prospects... a potent tool for boosting consumer spending... getting money flowing... “
The challenging global economic outlook means advertising’s prospects for the rest of 2012 and 2013 are not as strong as previously anticipated. Nonetheless, advertising spending is expected to grow in 2012 and 2013 (excluding direct mail). In total, advertising is forecast to be worth £16.8bn in 2012 and £17.4bn in 2013 (including direct mail*).
UK Total Media Ad Spending (2012-2016; Billion $ US; % Change Y-O-Y)
Total Media Ad Spend
% Change YOY
Source: eMarketer, September 2012
According to Suzy Young, Data Editor at Warc, “The forecast for UK adspend strengthens in 2013 as inflation subsides and real disposable income increases for the first time since the financial crisis.”
N.B. The methodology for collecting direct mail data changed from Q1 2012 onwards. Because of the different methodologies, figures comparing different periods do not include direct mail, but figures expressing the overall value of advertising spend in a period do include direct mail.
In addition, the recent Nielsen Global Survey of Consumer Confidence and Spending Intentions shows that global consumer confidence increased one index point in the third quarter of 2012 to a score of 92 as consumers are caught between very slow improvement in some regions, and the threat of further crises posed by economic volatility,
In the latest round of the survey, conducted between August 10 and September 7, 2012, North America and Europe reported the only quarterly consumer confidence increases, rising three index points to 91, and one point to 74 respectively.
Asia-Pacific and the Middle East/Africa regions remained flat in Q3 reporting index scores of 100 and 98, respectively. Latin America decreased two index points to a score of 94.
Overall, consumer confidence rose in 52% of global markets measured by Nielsen in Q3, compared to 41% of markets in the previous quarter. Confidence increased in 30 of 58 markets, declined in 19, and remained flat in seven.