Advertising spend in the UK grew by 2.9% in the first three months of 2020 but subsequently fell by 39% in the next quarter as the Covid-19 crisis hit, according to new figures.
Total ad spend will likely fall by 15.6% year-on-year in 2020 to £21.4bn, but growth of 12.5% to £25bn is predicted for 2021.
- January 20, 2021
- January 13, 2021
- September 21, 2020
Regional newsbrands were the worst affected media by the pandemic, according to the latest quarterly expenditure report from the Advertising Association and marketing agency Warc.
Ad spend on regional newsbrands is expected to fall by 27.5% this year. It fell by 15.5% in January to March, and a further 52.4% in the following three months.
Regional news websites’ online ad spend went from 0.9% growth at the start of the year to a decline of 50.5% when lockdown hit.
National newsbrands told a similar story, falling by 6.3% and then 46%. In 2019, they had three consecutive months of growth.
Online, they saw growth of 14.2% at the start of this year but then a fall of 40.2%.
Only purely online categories saw any growth in the first quarter. Search grew by 10.1% and online display, which does include digital revenue for news, magazine and radio websites, was up 11.8%.
They saw an estimated year-on-year drop of 31.5% and 27.1% respectively in April to June.
The News Media Association slammed the tech giants who continued to profit as all other media sectors “suffered dramatic declines” in advertising revenues.
It said: “These stark figures demonstrate that, despite the enormous pressures of the coronavirus pandemic, the tech platforms have continued to profit by ruthlessly exploiting demand for other sectors’ content.
“Meanwhile, media content creators- such as local news media titles which invest in the trusted journalism people are demanding in ever greater numbers – are left fighting for their very survival.
“We are calling on Government to act now and address this imbalance which is crippling our creative industries.”
Newsworks director of insight Denise Turner said: “We were so optimistic at the beginning of the year but since then clearly all media has suffered due to coronavirus.
“However, I am proud of what our industry has achieved together through the ‘All in, all together’ ad partnership with the Government. The collaboration we have shown has really helped the nation navigate the worst of this pandemic and hopefully we can continue to help all businesses and communities get back on their feet.
“If we can continue this spirit of collaboration and come together not just as an industry but as a nation then 2021 can be a much brighter year for all of us as the forecasts suggest.”
Warc’s head of data content, James McDonald, said the second quarter should prove to be the “nadir” of the Covid-19 crisis, but that growth in total ad spend is not forecast until the same time next year because of higher unemployment and the possibility of a second wave of the virus this winter.
“Our cautious optimism that investment will rebound from April 2021 is rooted, in part, in a belief that a ‘new normal’ will then have been established, borne by a successful vaccination programme,” he said.
“Under these circumstances, we feel the UK’s ad industry can attain a full recovery during 2021 as a whole, though total market value will still be down on 2019’s peak.”
Advertising Association chief executive Stephen Woodford said “the outlook for UK advertising remains fragile, with a significant decline forecast for the rest of the year, before welcome growth in 2021.
“This forecast demonstrates the need for Government to continue working with the advertising industry to boost confidence in the economy and among consumers.”
He urged the Government to avoid increasing rules and regulations but called for a tax incentive scheme to encourage advertisers to spend.