UK advertising market grew to record £21.4bn in 2016 as Google and Facebook took the lion's share

UK advertising hit a record £21.4bn total in 2016 with Google and Facebook taking the lion’s share of the money.

According to the AA/WARC Expenditure Report, it was the first time advertising has exceeded its pre recession levels in real terms (taking into account inflation).

Internet advertising (not including news brands online) grew 13.4 per cent to £10.3bn. A report earlier this month from the IAB suggested that nearly 80 per cent of this digital growth went to Google and Facebook.

Together the two US internet giants are reckoned to take more than half of UK online advertising. According to a report by analysts OC&C their share of UK online ads is to rise to 71 per cent by 2020.

Press Gazette has launched a campaign calling for a fairer deal between Facebook and Google and news publishers.

The latest figures show that while the overall advertising market is growing, news publishers’ share of advertising is shrinking (despite the fact website readership figures for news continues to grow sharply).

James Macdonald of WARC said: “The UK’s ad industry is experiencing the most seismic shift since WARC began monitoring in 1982. Last year exemplified this, as over 95 per cent of the money entering the market came from digital formats. The trend will continue as ad tech improves and consumers spend more time with their internet-connected devices.”

Mobile internet advertising grew by 45.4 per cent year on year to £3.9bn in 2016 and so accounted for nearly all the growth in the internet category.

TV advertising was flat year on year at £5.3bn.

For national newsbrands and magazines digital growth failed to offset print decline.

Regional newspapers reported overall advertising decline of 13.2 per cent, and digital decline of 3.4 per cent.

Radio showed strong overall growth bouyed by digital advertising up 35 per cent to £28m.

Here is how the UK’s £21.4bn 2016 advertising market divides up according to AA/WARC:

Internet: £10.3bn, up 13.6 per cent
(of which mobile: £3.9bn, up 45.4 per cent)

TV: £5.3bn, up 0.2 per cent

National newsbrands: £1.1bn, down 10 per cent
(of which digital: £230m, up 4.9 per cent)

Regional newsbrands: £1bn, down 13.2 per cent

(of which digital: £193m, down 3.4 per cent)

Magazine brands: £877m, down 6.8 per cent
(of which digital: £282m, up 0.2 per cent)

Radio: £646m, up 5.4 per cent
(of which digital: £28m, up 35 per cent)

Cinema: £257m, up 8 per cent

How £20.3bn was spent on advertising in the UK in 2016 at a glance (source AA/WARC)

Overall, UK non-news brand internet advertising has grown ten-fold since since 2005 while cash spent with marketers on national and regional newspapers and their websites is less than half what it was.

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