The UK advertising market exited 2011 on a positive note, with ad spending up 2.7% on the year and expectations for stronger growth in the two years ahead, according to the latest report by the Advertising Association and marketing information provider Warc.

The AA/Warc Expenditure Report reveals that UK advertisers spent £16.1bn last year. The 2012 amount is forecast to rise by 3.8%, outstripping the growth rate predicted for the remaining economic sectors. The picture is expected to be even brighter in 2013, when advertising revenues are seen as expanding by 4.9%.

The strongest revenue generator in 2011 was Internet advertising, whose value grew by an impressive 16.8% to reach £4.8bn. After this extremely strong performance, the channel now accounts for 29.7% of the total ad market. AA and Warc expect digital ad revenues to grow by 8.9% this year.

TV ad sales brought in £4.2bn, climbing 1.9% and ending up with a 25.8% market share. The prognosis is for a 2% rise in 2012.

One category that had no cause for celebration was print, where 2011 ad revenues fell by 8.4% to £3.9bn. The decline for business magazines amounted to a hefty 14.6%, while regional newspapers recorded a drop of 9.6%. AA and Warc forecast a significant improvement in 2012 insofar as the decline is expected to be only 0.9%. However, the share of the print category is expected to continue slipping after the 3% drop in 2011, which left it with 24.5% of the overall market.

Another loser was cinema, which generated £172.1m, or 6.6% less than the previous year. Out-of-home and radio managed to deliver respective growth of 0.6% and 1.6%, translating into revenues of £886.3m and £427m.

Ben Hollom

April 13, 2012