GroupM, responsible for more than $50B in annual media investment through its agencies Mindshare, MediaCom, Wavemaker, and others, has released its 2021 report into the UK advertising market.
The news, which is generally encouraging for publishers, shows that the overall UK ad market will grow by 30% this year vs. the previous estimate of 24% published in GroupM’s June findings. This is mainly due to stronger than expected growth in digital and television. Further, macroeconomic conditions continue to reflect a favorable context for advertising market growth.
However, print continues to take a hit with GroupM expecting that print media will see continued revenue declines over the short term. This is tempered by digital print revenues which GroupM expects to grow faster than expected.
GroupM also holds the view that ‘ad targeting’ headwinds, notably the sunsetting of third-party cookies late in 2023, will ‘not have any meaningful impact on media investment pounds flowing into digital’ because media owners will continue to have more data than others, allowing them to capture the bulk of data-driven ad spend.
Key ‘at a glance’ data for publishers:
- Expansion is expected to be +34% this year.
- This is largely being driven by the scaled digital platforms (major social and e-commerce platforms) that once again posted strong revenue gains for the last quarter, with very little sign of slowing down.
- 77% of advertising revenue goes to digital media platforms.
- The short-term outlook for print will likely feature revenue decline reflecting consolidation as driven by larger players such as Future PLC, before a return to low-single digit growth by 2026.
- That said, there is faster than expected growth in digital print revenues, and the expectation now is that the share of digital will be greater than non-digital in all print categories by 2023.
- Audio has recovered more quickly than expected, with revenue growth expected at +18% vs. 2020 reflecting an increase over 2019 levels.
- Going into 2022, continued growth is expected as publishers and marketers continue to experiment with the opportunities created by smart speakers and invest more in podcast content.
Issah Abdul-Moomin, Global Corporate Development at GroupM, told WNIP, “While UK publishers are experiencing a rebound related to the return to pre-COVID conditions, we expect that print will continue on its pre-COVID decline trajectory. However, as publishers transform their businesses to make them better suited to the realities of a tech dominated media landscape, we see reasons for positivity.
“For instance, the continued pursuit of revenue innovation in the form of commerce initiatives and renewed focus on subscriber growth appears to be paying off. We also expect some consolidation that should make for a smaller but healthier industry which could lead to a resumption of growth after 2026. We are also seeing faster than expected growth in digital print revenues, such that we expect share of digital to be greater than non-digital in all print categories by 2023.”