The UK media industry has shown the global ad industry there is hope of a good recovery after it reported (May 2022) that it has regained hundreds of millions of dollars in ad revenue last year, following a marketing spend collapse during the pandemic.

Total ad spend across national news brands was up 14% (to £846m) in 2021. Regional news brands’ total was £510m, up 9%. This is according to the latest Advertising Association/WARC Expenditure Report.

• Overall, the report found a record £32bn was spent on advertising (in the UK) in 2021.

• The two largest sectors were search (£12bn of the total and growing 39% year on year) and online display (£11bn, up 47%).

• The UK’s overall ad market is forecast to grow by 11% this year to £35bn, driven by a strong start to the year.

But the report also predicted that growth in the news media industry would drop in the coming years.

This is all very positive, however, in a warning to many in legacy media: The regional news sectors (and magazines) are expected to have the largest reduction in ad spend in the coming years, with regional news predicted to fall 5% in 2022 and 7% in 2023.

Regional news has seen a more dramatic drop in advertising revenue than national newspapers. Since 2017, the sector’s ad spend (in the UK) fell from £887m to £510m (despite the latter figure here showing as a year-on-year increase). By 2023, that is predicted by WARC to drop a further £60m to £450m.

While further general growth is forecast, inflationary pressures on the cost of advertising — plus the ongoing uncertainties with the Russian/Ukrainian war — means we should be cautious. However, despite the uncertainty created by conflict in Europe and supply chain pressures, WARC does not expect that to translate into a recession for the advertising sector in the coming months.

WARC says the recovery was helped by the pent-up investment/demand on already-established online platforms and in part by the emergence of retail media as a major contender for marketing budgets.

Standing out

That said, other ad industry figures were not as optimistic. Marketing analytics company Adverity commented that this may look like good news, but it means that advertisers are going to have even more competition to create, stand out, and be heard.

The need for caution and pacing

With four in every five dollars now being spent online, the competition for share of attention is huge. The question now is: Is this increase in money increasing performance?

A good point. And to deliver, we will need to make sure our client’s advertising money is used effectively. That normally involves pacing client budgets, and there are a few factors we need take into consideration here. 

Ad campaign performance advice

It may seem obvious, but one of the biggest considerations for how to pace a client’s budget relies on how their campaigns are performing. Do you measure these as a matter of course? When assessing where to allocate a ad client’s spend with us, we should consider three factors:

1. Ability to scale: If the audience is driving a good volume of results for a lower cost than others, we need to allocate a greater portion of spend there. Are you demonstrating attention to this detail and flexibility?
2. Spend and performance over a period: If a client campaign has been running for a while, then we can analyse the impact that different spend levels have had on them. This will indicate whether an increase in spend will be detrimental to performance.
3. Sales funnel implications: What is the value of the advertising we are running? If it leads to a direct sale or a return on ad spend, then we’ll know how much more we can allocate towards a campaign to stay within the goals. We should try to use the best data we have to set a forecast of cost per conversion and optimise from there.

I do hope the above can aid your collaborative sell and progression of your media advertising client relationships. As I have mentioned in the past, the closer we get to our agencies and advertisers with our attention, expertise, and insights, the more respect we get and, ultimately, we will reap the monetary rewards that accompany that.

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