U.K. on Track to Become First Country Where Half of Ad Spending Goes to Digital

Getty Images

Unlike in the U.S., TV will only account for 24 percent of all spending in Britain and 28 percent in Western Europe in 2015, according to a new forecast.

Half of all U.K. ‎advertising spending in 2015, or nearly $12.27 billion (£8.0 billion), will go to digital media, according to research firm Strategy Analytics. That would make the country the first in the world where half or more of all ad spending goes to digital media.

In Britain, the Internet and mobile devices will attract more than twice the ad spending that goes to TV, which will account for a 24 percent share this year, according to the forecast. Strategy Analytics measures around 25 major media markets. Forecasts from other research firms have also called for Britain to reach the 50 percent-plus ad spend milestone this year.

Scandinavian countries and Australia are also nearing that milestone.

Read more Hollywood Earnings Season: Ad, Currency Woes to Affect Results

Digital crossing the 50 percent share threshold is a seminal moment in the history of the ad industry, particularly factoring in its dominance in the U.K. compared to globally,” said Michael Goodman, co-author of Strategy Analytics’ report. “Digital accounts for a third of ad spend in Western Europe, 30 percent globally and just over a quarter in the U.S. — where TV still rules the roost" with a 42 percent share.

By 2018, digital’s share will rise to 56 percent in the U.K., compared with 23 percent for TV, according to Strategy Analytics.

In 2015, digital ad spend in Britain will grow 9.5 percent, less than elsewhere due to its higher share. Across Europe, digital will post 9.3 percent growth this year, compared with 13 percent in the U.S. and 13.8 percent globally, the firm forecasts.

Read more Russia Is a Drag on Global Ad Growth, Experts Say

For Western Europe, Strategy Analytics forecasts 3.5 percent total ad growth to €99.9 billion ($114 billion), driven by online, followed by cinema, up 4.3 percent, and TV, up 2.7 percent.

“Western European ad spend growth in 2015 will be solid and unspectacular due to the lack of "impact" events combined with increased political and economic instability in parts of Eastern and Central Europe,” Goodman said. “However, it looks better for 2016, a bumper year for ad-stimulating events, with the Olympics and European [Soccer] Championships.”

Digital will remain the biggest ad format in Western Europe in 2015, accounting for 34 percent ($38.7 billion) of total ad revenue, followed by TV with 28 percent.
‚Äč
In the U.S., observers have discussed whether ad dollars are flowing from TV to digital.

Read more Is Digital Media Starting to Eat Into TV Advertising Revenue?

“Even though TV’s share is declining in Western Europe, this is less about ad dollars flowing out of TV and more about dollars flowing into digital from print and radio,” said Leika Kawasaki, co-author of the forecast. “Therefore, major TV broadcasters across the continent will see little, if any, real decline in revenues — just a shift in the source from linear TV ads to online video."

But print ad spending will decline further in 2015, making it the only ad category to see a drop in Western Europe. Said Kawasaki: "Print will be the major casualty, falling to 22 percent market share in Western Europe in 2018 — almost half the share it held a decade earlier."

Email: Georg.Szalai@THR.com
Twitter: @georgszalai

comments powered by Disqus