UK to replace Japan as third largest ad market globally
The UK has shifted up the rankings of the largest global ad markets to third place, replacing Japan, and sitting just behind the US and China in Groupm’s end-of-year forecast.
Growth in the UK’s ad market, which is the largest in Europe, is expected to grow by 4.4 per cent this year with an estimated revenue of £41.3bn, according to a forecast by WPP’s media investment group.
It falls just shy of a previous 4.8 per cent projection and is slower than the overall global ad growth rate of 5.8 per cent.
President of business intelligence at Groupm, Kate Scott-Dawkins, said the bump up the charts is largely due to a weaker Japanese yen over the last six months.
“For the wider economy, we view the addition of ad-supported models (or the growth of existing models) as a positive, not just for traditional media owners, but also retailers,” she explained.
Within digital advertising, retail media is poised for over 16 per cent growth in 2024 and could outstrip the traditionally stronger TV ad revenues by 2025.
Groupm expects TV advertising, including digital and traditional, to fall 8.7 per cent in 2023 with a small 1.2 per cent recovery next year and a rapid rise in connected TV (CTV) advertising.
Digital advertising revenue, which makes up the vast majority of the UK’s total industry advertising revenue, is projected to grow by 7.3 per cent in 2023, but then growth is projected to slow to 5.5 per cent in 2024.
Next year, Groupm has downgraded advertising growth from 5.3 per cent to 4.6 per cent.
But Dawkins said that, as inflation cools, growth will be better in real terms.
“There are pockets of faster-growing channels in the UK notably retail and CTV as the market embraces innovation and the shift of audiences to digital viewing and buying platforms,” Dawkins added.