British companies forecast to spend a record £7.9bn, up 13% on last year prompts the return of broadcast extravaganzas.
Marking the return of the annual big-budget Christmas marketing battle is the expectation that advertisers are to spend almost £1bn more marketing their products this festive season than last year.
During the critical “golden quarter” to Christmas, retailers’ most lucrative three-month sales period, UK companies are forecast to spend a record £7.9bn on advertising.
Since figures began being compiled in 1982, that is the highest quarterly ad spend ever recorded by the Advertising Association and the research firm Warc and a bounce-back of more than 13% compared with last year’s festive season, which was muted amid Covid restrictions.
In response to the pandemic, companies slashed spending on advertising and toned down their ad campaigns last year, however, but this year marks the return of the big-budget broadcast extravaganza. Spending on television ads is forecast to increase by 9% to £1.56bn – the fastest annual rate of growth in TV advertising spending since 2010.
Despite widespread concern that supply chain problems, including clogged ports and shortages of workers and HGV drivers, could lead to empty shelves and inventory issues, the figures showed advertisers were expecting Christmas to be business as usual, authors of the latest forecast said. James McDonald, the head of data content at Warc, stated:
“The latest data demonstrate bullish trade in the UK’s advertising sector despite potential inflationary headwinds and supply chain disruption in the run-up to Christmas.”
“Strong fourth-quarter projections for TV – a medium heavily leveraged by retailers during the golden quarter – and search, which encompasses activity on e-commerce platforms, suggest it will be largely business as usual for the industry this year.”
With spending on search advertising forecast to increase by 15% to £2.7bn, this season is expected to once again be a “digital marketing Christmas”. Meanwhile, online display advertising, where the most powerful players are Facebook and Instagram, rises by 12.7% to £2.4bn. Search and the online display will account for 65% of all ads spend in the Christmas quarter.
Intended to experience the biggest proportional bounce back after being the hardest hit during the lockdown last year are cinemas and the out-of-home advertising sector – which covers everything from billboards and posters to sites in train stations, airports, and the underground and on buses.
Although cinema advertising experienced a resurgence since the latest James Bond film, No Time to Die broke box office records last month, it is forecast to grow by 3,160% year on year in the final quarter.
Despite practically grounding to a halt with almost no commuters or domestic travel last year, the out-of-home market is expected to grow by well over 50% year-on-year.
Even though national and regional newspapers will have some growth, with spending on print advertising up 4.3% and 7.9% respectively, it is not enough to make up for double-digit percentage cuts seen last year.
Spending on online ads on national and regional publishers’ websites, however, is forecast to rise by 3.8% and 18% respectively, more than recovering the declines seen in those areas last year.
Radio ads spending will increase by 10%, while print magazine ad spend will rise by 6%, with online up 7%, again growth at levels unable to claw back the cuts to budgets last year.
