Advertisers expected to cut £725m from Christmas marketing budgets
Advertisers are cutting over £700m from their marketing budgets in the run-up to Christmas due to the economic hit from the coronavirus pandemic.
It is expected that £6.2bn will be spent in advertising across the fourth quarter but UK advertisers are forecast to spend 10.5% less this year.
This is the biggest drop in advertising in the run-up to Christmas since the Advertising Association and Warc started collecting data in 1982.
Specifically, the advertising budgets for TV, the most popular platform for the Christmas ad campaign, is forecast to be down 2.7% to £1.35bn in the fourth quarter, underlining its continued relative importance for advertisers seeking big audiences.
The AA/Warc forecast said the fall in spending is due to the increased likelihood of sustained localised lockdowns over the winter, a disorderly Brexit and rising unemployment.
In the data collected in the latest quarter up to October this year, the group found that already the UK’s ad market fell by a third (-33.8%) to a total of £4.0bn in Q2 2020 as the nation went into lockdown. Excluding direct mail, the UK’s ad market contracted by 32.1%, or £1.8bn.
Social media and paid search – almost half of the UK’s ad market – recorded their first annual falls on record in Q2 2020. These formats were among the few to grow during the first quarter, but search spend fell by a fifth in Q2 and social media investment was down by 17.0%.
The report also found that total market growth is expected to return from Q2 2021, though the full-year total will not be enough to top 2019.