Group M has upgraded its UK adspend forecast for next year, despite concern from businesses over the uncertainty of Britain’s trading relationship with the European Union.
UK adspend is forecast to grow for the eighth successive year in 2017, with predicted growth up from 5.8% to 7.2%, according to latest figures from the WPP media agency group.
Group M has also upgraded its growth forecast for this year – up from 6.3% to 7.2% for 2016.
However, the outlook for traditional media advertising has deteriorated slightly, from -1.1% to -2.6% for 2016 and from +0.5% to -1.4% in 2017.
The TV market, which grew 10.4% last year, is expected to be down 0.1% this year and up 1.0% in 2017.
Meanwhile, cinema advertising is expected to grow by 1% in 2016 after a bumper 2015 when spend grew by 21.5%. In 2017, cinema is expected to grow 3.4%.
The predicted ad market share for pure-play digital has risen by a percentage point to 52% this year and up three more point to 55% next year.
Digital display demand is set to rise particularly strongly next year, with a 15% predicted rise, with paid search accelerating and remaining the largest driver of growth.
Adam Smith, futures director at Group M, said: “The effect of the future EU exit on the UK economy is unknown, but the short-term impact was negligible. To our own surprise, we are revising UK advertising growth up from 6.3% to 7.2% for 2016, and from 5.8% to 7.2% for 2017.
“The main driver that we have seen is paid search accelerating again. It benefits from rising automation and the immediacy needed for mobile and performance-minded advertising.
“We expect digital display advertising to continue growing by 18% in 2016 and 15% in 2017. The ambition of pure play digital vendors to conquer TV territory and categories will be hard-won, but today’s undisputed winner is pure-play digital.”