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April 28, 2023

UK ad spend in news steady in 2022 but decline forecast for 2023-24

AA/WARC data reveals overall UK ad spend grew in 2022 although spending on news fell slightly.

By Aisha Majid

Advertising spend in the UK news industry fell slightly between 2021 and 2022, a new report shows.

The data from the Advertising Association/WARC reveals that total ad spend across national news, regional news and magazines was £1.88bn in 2022 – down by 1% on the £1.9bn spent in 2021.

Total ad spend across national newsbrands was down 2% to £826m in 2022. Spending on regional newsbrands was down 1% to £505.2m, while magazine advertising totalled £552.1m, a fall of 1%.

While overall spending fell slightly, online spending grew. Total spend on online advertising in the UK news industry was up 2% to £937m. Regional newsbrands saw slightly higher growth at 3% as online ad spend on local news reached £259.2m.

The UK media industry regained hundreds of millions of pounds in advertising revenue in 2021 following a collapse in spending in 2020 during the pandemic.

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Overall across all the categories measured by AA/WARC, the report found that UK ad spend grew 8.8% in 2022 to reach £34.8bn. Cinema recorded the strongest relative growth with spending up 123% to £229.3m as events and out-of-home entertainment continued to bounce back after the pandemic.

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Search and display advertising, dominated by tech giants Google and Meta, continued to take the lion's share of ad spend. Search revenue was up 13% to £13.1bn, while online display ad spend was up 10% to £11.9bn.

Elsewhere, radio ad spend increased by 3% to £740.1m between 2021 and 2022, while TV advertising fell by 1% to £5.4bn. TV was the only other sector in addition to news to record a fall in 2022 in the categories measured by AA/WARC.

Despite strong overall growth in 2022, the report predicts that spending will slow down markedly in 2023. AA/WARC predicts that overall ad spend will grow by just 0.5% in 2023, before bouncing back to 3.9% growth in 2024.

For news and magazine brands, online ad spending is predicted to grow in 2023. The overall picture is, however, one of decline for the sector.

Overall advertising revenue for national newsbrands is expected to fall by 5.2% in 2023 and a further 3% in 2024. Regional newsbrands are predicted to see spending down by 5.8% and 4.9% in 2023 and 2024 respectively. Ad spend in the magazine sector is expected to fall by 3.2% in 2023 and a further 2.6% in 2024.

The latest predictions come on the back of years of declining ad spend for the news industry. Today, the national news media’s ad spend is worth 20% less than the £1bn+ it was in 2017.

Regional newsbrands have been especially hard hit. Ad spend is now 40% less than the £887m it was worth in 2017.

Stephen Woodford, Advertising Association chief executive, said: "These figures reflect the broader macro-economic environment, with a cautious outlook as the UK economy narrowly avoids recession, but shows very little signs of real growth. Advertising investment is an important barometer of business performance and confidence in the economic outlook. It drives competition and innovation, supporting job creation and livelihoods, returning a ration of £1 invested generating £6 of GDP."

James McDonald, director of data, intelligence and forecasting at WARC, echoed the gloomy picture: "The latest verified media data reveals that the UK’s ad market entered recession in the second half of 2022, with clear signs that the downturn has continued into the opening months of this year.

"Sharp and sustained falls in social media spend – the first time this has been recorded in the UK – are likely to have been instigated by reduced advertising activity among the SMEs who comprise a ‘long tail’ of ad volume on social platforms and whose margins are under incredible stress as inflation bites. One in every 202 UK companies entered liquidation in 2022 – the highest rate in seven years – and it is unsurprising to see these pressures reflected to some degree within advertising trade."

McDonald added that the outlook is set to start improving later this year.

"Trading conditions are not expected to improve until the second half this year, with economic activity and advertising investment both largely flat during 2023 as a whole. The outlook is set to improve next year, however, as the economy returns to growth, inflation falls nearer to the government’s 2% target and consumer confidence lifts, though advertising spend is still predicted to rise below its long-term average in 2024."

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Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
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