The UK advertising market grew 9% to £9.2bn during the first three months of 2024, almost three percentage points ahead of last quarter’s forecast.

The UK advertising market grew 9% to £9.2bn during the first three months of 2024, setting a new high for a first quarter period, according to new figures from the Advertising Association (AA) and WARC.

The growth was almost three percentage points ahead of last quarter’s forecast due to stronger than expected online growth, which accounted for 79.7% of all UK spend in Q1 2024.

However, after allowing for inflation, real growth for ad spend in Q1 stood at 5.5%, indicating that the UK advertising market saw £465m of organic growth as inflationary pressures eased year-on-year.

As a result, AA and WARC now forecast a 9.2% rise in UK ad spend in Q2 (April to July) to reach £9.7bn, driven by increased spending around the men’s Euros and the snap general election.

Advertising Association’s CEO Stephen Woodford says the growth and upgraded forecast is a “positive sign” that the industry is one of the “driving factors” in the UK’s economic recovery.

“This is a timely reminder of its dynamism as the new Government seeks to create an environment for growth, through political stability and a new industrial strategy,” he says.

“Advertising is a UK-wide industry, with three in five advertising jobs based outside of London, and it is central to the successful development of the digital economy across the whole country.”

Expectations for both 2024 and 2025 have seen an uplift in the latest dataset. The UK advertising market is now projected to grow by 7.7% in 2024, reaching £39.4bn—an upgrade of 1.9 percentage points since the April forecast.

This year, out-of-home advertising is projected to grow by 12.5%, and search is expected to jump by 10.1%. Meanwhile, BVOD advertising spend is set to increase by 13.7%, crossing the £1bn threshold for the first time, fuelled by a summer packed with major sporting events.

The UK’s ad market is projected to rise by another 5.5%, reaching £41.6bn by 2025, an upgrade of 1.0pp from the April forecast.

A positive quarter
The vast majority of the UK’s ad spend between January and March was spent on online formats. Search, including retail media, rose 12% and online display, including social media was up 12.8%.

The latest dataset shows a return to growth for cinema (6.4%) and TV (1.2%), with BVOD seeing a continued strong increase at 19.2%. Additionally, radio has bounced back with a 7% growth.

Growth was offset by a decline in direct mail (-2.5%), national news brands (-4.9%), magazine brands (-4.9%) and regional news brands (-4.4%). However, these were all significantly up from the previous quarter.

On a sector-specific level, the consumables sector grew 16.1%, and services were up 8.9%. Whereas all other major categories posted year-on-year declines for the period.

“The enduring strength of legacy display media – chiefly TV, out of home, radio and cinema – was also evident in the first quarter, and we expect this to have sustained into the second due in part to short term stimuli such as the men’s Euros and snap general election,” says James McDonald, director of data, intelligence and forecasting at WARC.

“Overall, our outlook for the coming year is brighter than our last projection in April, with a forecast 7.7% rise in total ad spend this year ahead of the average rate recorded before the pandemic.”