According to the latest media and marketing forecast from GroupM, UK advertising is set to see an eighth successive year of growth, and the nation will remain one of the fastest-growing media markets in 2017 with a 4.1% increase in spending taking the industry to predicted investment of £18.6 billion.
This overall forecast is a downward revision from the 7% growth predicted in November 2016. This is according to the latest media and marketing forecast figures from GroupM, the world’s leading media investment management group.
The fall in ad investment growth predicted is partly attributed to a generalised drop in TV investment by several of the medium’s largest categories. This prompted GroupM to reduce its TV investment forecast from flat to -3% this year. Online advertisers are big and growing supporters of TV but are not enough to offset falling investment from TV’s more traditional categories such as food, finance, cosmetics and retail, many of which face multiple pressures on sales and margins.Another contributing factor to the more modest overall growth prediction is GroupM’s more conservative outlook on “pure-play internet” growth, from the 15% estimated in November to 11% predicted in the new forecast. GroupM defines pure-play internet as digital advertising minus elements attributable to “legacy” TV and print brands.
While the law of larger numbers is part of the slowing of pure play internet, another factor is the brand safety concerns which prompted some large advertisers to pause investment on unmoderated user-generated platforms. Advertisers are increasingly taking a more measured view toward digital as they grapple with developing data strategies; setting more coherent objectives; attribution considerations; increased brand safety and accountability expectations and the appreciating trade-off between risk, price and performance. This growing maturity in larger advertisers’ attitudes to digital marketing is a recurring theme in this new report.
Despite the concerns, pure-play internet is still providing nearly all of the net advertising investment growth in the market. GroupM predicts ad revenue to the other media will contract 4% in 2017, then stabilise in 2018. Stabilisation does, however, depend on traditional media owners better justifying their premium prices to an agency/advertiser audience.
A continuing challenge in TV is the accelerating loss of the 16-24 year-old audience. TV has always been an older-skewing medium, but the loss of younger, ‘lighter’ viewers – or at least their escape from TV’s measurement domain – makes TV’s measured audiences less varied. This nibbles away at the total campaign reach a given volume of audience can achieve. GroupM predicts 2017 will yield 59 billion 16- 24 year-old commercial TV impressions in the UK, a 10% drop since the prior year and the lowest volume since the arrival of Sky Digital in 1998.
GroupM’s inaugural forecast for 2018 is for total UK media investment growth of 4.5% to include pure- play digital gaining two points of market share, rising to 58%.