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UK Digital Ad Spend To Hit £15 billion In 2019

Double-digit growth will push digital advertising spend in the UK above £15bn in 2019, according to fresh forecasts from Barclays.

The bank predicts that marketers will spend more on UK digital ads in 2019 than they did in 2018, despite the backdrop of Brexit and the resulting economic uncertainty.

While the bank’s Adtech Ascendancy report doesn’t speculate on how Britain’s exit from the EU will impact the digital industry, it is fairly bullish about the market’s prospects even when the range of potential outcomes are factored in.

The report falls in line with recent findings from the Advertising Association (AA) and Warc, which recently outlined how Q3 of 2018 marked the 21st consecutive quarter of growth for the marketing industry. Warc and the AA claimed the uptick was being driven by increased spend on digital advertising, which they predicted would grow 9.8% in 2019, following on from an estimated 13.4% rise in 2018.

However, the latest quarterly IPA Bellwether offered a look at the bigger picture, noting that in Q4 of 2018 marketers noted no change to their overall budgets; marking the first-time growth has flatlined since 2012.

A separate Enders Analysis forecast published earlier this year, meanwhile, claimed a no-deal Brexit would plunge the UK ad industry into its first recession in a decade, with overall spend likely to decline by 3% or £1.4bn. TV and newspapers were cited as those most likely to be impacted by in a deal or no-deal scenario.

Challenges and opportunities in 2019

Although digital is set to fare better then other mediums in any Brexit situation, a selection of industry experts Barclays spoke with as part of its research cited in-housing and talent acquisition as two key areas of challenge for the year ahead.

Among the chief execs and chief marketing officer-level clients, Barclays spoke to as part of its research, it was clear brands were also taking a cautious approach to their relationship with so-called ‘Faangs’ platforms – Facebook, Apple, Amazon, Netflix and Google.

With the Google-Facebook duopoly alone accounting for 58% of the $111bn global digital advertising market, some of the experts consulted encouraged agencies to keep some distance and ensure they retain their objectivity and discretion.

Barclays noted that Faangs platforms have also been “a major driver of the explosion in technology M&A over the past decade,” noting that with the exception of Netflix, the remaining four have completed over 400 M&A deals since 2007.

The bank believes that M&A activity will continue “at pace” in marketing services this year, with private equity firms maintaining their interest in the sector and restructuring at companies like WPP “presenting a range of opportunities” for the industry.

Originally posted by Rebecca Stewart.

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