Championing advertising as a driver for economic, social and sustainable growth
- February 1, 2023
Chair, Advertising Association and CEO, Publicis Groupe UK
At the start of the year, as we emerged from the pandemic, the advertising markets were buoyed by a new sense of confidence and UK adspend was on track to reach a record high. Our quarterly AA/WARC expenditure reports help us monitor our sector’s continued recovery from the pandemic and our research shows that £1 spent on advertising contributes £6 to UK GDP. Adspend was worth a total of £32bn in 2021, contributing a vital £192bn GDP to the economy.
No one had predicted the new headwinds that appeared on the horizon this year, from the war in Ukraine to continuing lockdowns in other parts of the world, most notably China, all serving to add inflationary pressures to every aspect of our economy, including the advertising supply chain. We all know that this perfect storm has triggered huge cost of living pressures which are impacting every household and business across the UK.
As these new challenges arose, the association made sure the industry had a voice with ministers and civil servants through our regular roundtables and calls. This engagement with Government is a vital part of our work as we continue to navigate issues from how we support our colleagues in Ukraine to how we respond to the energy crisis.
In April, we published a report, UK Advertising’s Adspend Review: The Pandemic Effect which examined the reasons why 2021’s ad market emerged £8bn larger than April 2020’s forecast. It found growth due to inflationary pressures, but also due to a faster-thanexpected growth in online advertising, caused by the enforced lockdowns which trained the UK population how to shop online.
Three in every four pounds spent on advertising in the UK is invested in one of a wide range of online formats – only China has an equivalent share of this proportion. The figure reflects the increasing work our industry is doing to support the digital transformation of brands of all sizes. We must maintain our commitment to upskilling our talent to meet these demands – a priority that we’ve identified in our talent research.
By October, advertising spend was predicted to be worth £35bn in 2022, a downgrade on previous forecasts given the high levels of inflation facing all sectors, but still including a record £10bn spend expected for the Christmas quarter.
These figures show, once again, how advertising is an essential driver of the economy, supporting competition and innovation. This is also true of UK advertising on the world stage.
We punch well above our weight, with the latest data showing we exported £11.7bn worth of advertising and marketing services in 2020, maintaining the same pre-pandemic levels. This makes the UK second in the world, to the US. We are being challenged though by international competition and perhaps this is most obvious when it comes to the number of LIONS we won in 2022, where the UK dropped behind Brazil into third place in the official rankings. This should be a cause for concern – we need to do everything we can to strengthen the UK’s position as a global hub for advertising and marketing services and award wins are a key component.
This year also saw a greater drive to producing more inclusive and more sustainable work. The UK advertising industry is leading the charge with initiatives like the Campaign Ad Net Zero Awards which demonstrate how advertising can help build a net zero economy, and the return of the All In Census on March 15, 2023. I urge everyone to do what you can in your own businesses to support these important initiatives.
The UK advertising industry is leading the charge with initiatives like the Campaign Ad Net Zero Awards which demonstrate how advertising can help build a net zero economy, and the return of the All In Census on March 15, 2023.
To read the Advertising Association 2022 annual review in full, click here.