A growing advertising market is starting to become less dependent on print as a shift to digital characterises the latest industry research.


Direct mail has been directly hit by fears surrounding GDPR, says report

The Advertising Association/WARC report for Q3 2018, released today, indicated a year-on-year rise in UK advertising expenditure of 5.1%, with a total £5.6bn spent in the third quarter of the year. This represents 21 consecutive quarters of market growth and indicates a projected £23.5bn total UK ad spend over the whole of 2018.

Spending on traditional print advertising was shown to be in decline, weighing down the growth of a generally buoyant industry. Spending on national news brands fell by 7.1% year-on-year for Q3, while solely digital spend rose by 3.7%. The disparity was more apparent in the regional news market, where total spending fell by 5.3% but digital grew by 10.9%.

Projections from the AA/WARC report indicate this gap will continue to widen into 2019 as full-year digital spend is predicted to grow in both national (8.1%) and regional (9.3%) news, but the print-inclusive figure is expected to drop by 2.3% for national and 4.4% for regional.

WARC data editor James McDonald said: “The main trend in our Q3 report is the shift to digital. A lot of money is going in that direction and it is lifting the total market. At its core is programmatic trading, which uses personal data to get ads to the right people.

“That kind of informed user data has driven a boom, and traditional media is suffering as a result as brands are changing their models and moving into digital streams.”

Spending on internet advertising outpaces all other outlets, making up £11.5bn ad spend across the year in a market valued at £22.1bn in 2017. Its projected growth of 13.4% and 9.8% across 2018 and 2019 would see it continue to outgrow any alternatives.

Direct mail is projected to suffer in the near future, with a fall of 3.1% between 2016 and 2017 and projected falls of 8% and 8.2% through 2018 and 2019 respectively. The key contributing factor, according to McDonald, is industry fears surrounding GDPR.

“Ad spend on direct mail is down by 14% for the quarter,” he said. “GDPR has had a massive impact on the market as people are trying to play it safe and not take risks – direct mail is seen as a risk under the new regulations.

“I do not think it will be the death of direct mail, but there will be a period of sustained turbulence as people get used to the new ways. It remains the third-largest advertising format with an annual spend of more than £1bn.”

McDonald also downplayed print’s prospects in the out-of-home (OOH) sector, traditionally built on print formats like posters and billboards. He said that OOH’s projected growth of 4.2% for the full year in 2018 was largely due to new digital formats introduced to the sector.

However, he deferred that “print gets a raw deal at the moment but remains effective as part of a media mix”. McDonald also stressed that AA/WARC’s projections were based on the eventuality of a “business-favourable” Brexit outcome and would be subject to change.

Concluding, he said: “While our predictions are very conditional and we could benefit from more stability, our main takeaway from this report is that advertising still works.

“Now, advertisers have more ways to reach people than ever before and print still represents the vast majority of advertising income. People just need to learn to refine the components at their disposal, but all indications show a healthy industry.”


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