Downturn over for UK ad and PR sectors, finds WPP and PRCA reports

Optimism has returned to the advertising and PR sectors, signaling a revival of UK’s recession-ridden economy. According to the results from two separate survey reports, advertising and PR budgets are surging to pre-recession levels, lifting projected growth trajectories for the respective industries.

WPP’s media buying arm GroupM released a report titled, ‘This Year, Next Year UK’ which predicts ad spending in the UK to increase by 7% this year, double the rate (3.3%) forecast by the agency six months ago.

According to the report, UK ad spend is expected to reach a total of £13.9bn in 2013, up from £13bn last year, and overriding the previous peak of £13.1bn in 2007.

Fuelling these spends is digital advertising, which accounted for 44.2% or £6.2bn of the total UK ad spends, and is estimated to grow to 50% or £7bn next year.

While ad spends on TV are in line with market projections at 6.8%, other verticals of media such as print, outdoor, radio and cinema have not kept pace with the growth patterns.

Comparison of media spends: GroupM report

‘This ad recovery is spectacular, but not a phenomenon,’ said Adam Smith, GroupM Futures Director. ‘UK annual GDP is likely to have risen 9% in cash terms since 2008, and annual advertising the same. The question is whether advertisers sustain their optimism that UK households are feeling richer, and might actually get richer, between now and the election expected in spring 2015.’

Meanwhile, the UK PR industry also indicates a growth in budgets, new business and staff numbers, by comparison to the same period in 2012, according to Public Relations Consultants Association’s (PRCA) Third Quarter Trends Barometer.

The survey indicated that 44% of agencies reported an increase in client budgets either significantly or marginally, compared to 30% last year. 57% believe staff numbers will increase in the next quarter, while only 37% thought this in Q3 of 2012.

Moreover, 75% of agencies stated that the level of new business in the third quarter of 2013 was either busy or very busy, compared with 59% in the same period last year.

The surging business momentum has lifted recession blues, allowing agencies room for optimism. According to the report, 64% of agency heads are feeling more optimistic about the PR industry, compared with 31% in the previous year.

Francis Ingham, PRCA director general declared: ‘For the PR industry, the downturn is over; the recovery is here to stay. It’s time to be optimistic again.’