Britain’s ad spend to hit £20bn a year

Advertising spend in the UK will reach £20bn a year by 2015, as brands continue to ramp up promotions on digital formats and traditional media companies show signs of recovering from the combined impact of recession and the rise of the internet, reports The Guardian.

The World Cup in Brazil this summer will help television, which took £4.6bn last year,report a 6.6% rise this year, according to data published by the Advertising Association and the World Advertising Research Centre.

National newspaper advertising, which fell nearly 5% last year, is expected to stabilise this year and turn positive in 2015, with a near 2% increase. Magazines will continue to lose income this year, but turn positive in 2015.

In digital, mobile advertising is beginning to dominate. Smartphones and tablets are expected to account for one quarter of search engine advertising this year, rising to a third next year. Of the £6.3bn spent each year on UK internet advertising, £1bn is claimed by mobile.

“The forecast explosion in mobile advertising and digital formats points to UK advertising at the centre of a global revolution in consumer information, service and choice,” said Advertising Association boss Tim Lefroy.

The industry has improved its forecasts after positive data from the International Monetary Fund and the Bellwether report on marketing spend, which point to sustained economic recovery in Britain.

The flow of money into mobile advertising, and other more recent formats such as on-demand television and newspaper websites pushed UK ad spend up nearly 4% to £17.9bn last year. The recovery is set to continue with a 5.5% increase this year and a 6.5% rise in 2015.

The newer platforms launched by older media companies are powering ahead. Broadcasters made £126m in 2013 from adverts placed in on-demand content. More viewers are turning away from live channels to watch programmes at times that suit them, and film rental over the internet is becoming a popular budget alternative to going to the cinema. As Channel 4’s on demand service, 4OD, and the ITV Player gain viewers, spend in this area will be growing at more than 30% a year by 2015.

National newspaper websites took nearly £184m last year, an annual rise nudging 20%. They will grow a further 24% this year, and by a similar amount next year. Digital still accounts for a small proportion of the overall £1.5bn income from advertising for the national news business, but this is changing as leading British news sites gather worldwide followings.

In pole position is the MailOnline, which has 11 million readers a day and 180 million a month. With global interest in the disappearance of Malaysia Airlines flight MH370 pulling in readers, the Guardian surpassed 100 million a month for the first time in March, averaging 5.7 million a day. The Telegraph now has 72 million readers a month.

The picture is less rosy for regional newspapers, which have been hit by the collapse in recruitment advertising. They accounted for £1.3bn of revenue last year, almost as much as national news brands, but that figure was down 7.3% on 2012. Meanwhile, digital revenues are growing more slowly than for national publications, up just 8% to £139m last year. Overall income for regionals is forecast to continue to fall, albeit at a slower rate, narrowing to a 3% drop in 2015.

There are tentative signs of an improvement in the recruitment advertising sector, which has lost 60% of its value since 2007, leading to the closure of many specialist trade titles. Investment in recruitment is expected to nudge up 1% this year and grow 3% in 2015.