The UK advertising market is not expected to recover fully until 2022, according to a revised forecast from the latest Advertising Association/WARC Expenditure Report.
In July, the report predicted a 2021 return-to-growth of 16.6%. This forecast has now been downgraded to 14.4%, meaning that growth next year will fall just short of offsetting this year’s losses completely, with full recovery now expected by Q2 the following year (see chart below).
Adspend is set to fall by 14.5% in 2020 to £21.5 billion as a result of the COVID-19 outbreak, equating to a loss of £3.6 billion compared with 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 £6.2 billion, some £724 million lower than the previous year.
Looking ahead to 2021 however, cinema adspend is forecast to rise by 138.3% as venues fully reopen and films that have been postponed finally make it onto the big screen.
Other media predicted to perform well year-on-year include out of home (+57.1%), regional news brands (+16.2%) and magazine brands (+18.8%), underpinned by strong growth in their online formats.
Stephen Woodford, the Advertising Association’s CEO commented: “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 added: “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.”