The Advertising Association and Warc Expenditure Report highlights quarterly UK advertising spend on direct mail, magazines, regional and national news titles, out-of-home (OOH) signage, radio and television and gives forecasts for the coming two years.
Total advertising spend across all formats in H1 2016 was higher than forecast, up 5.2% to £9.9bn, but this was primarily driven by a 17% increase in internet advertising spend and a 30% boost in digital OOH advertising spend.
But while print’s fortunes are more mixed, with most areas experiencing declines or small increases, the figures do not take into account the value that print can create and the bigger picture paints a different story.
According to the report, national and regional newsbrand print adspend fell by 9.2% to £218m in Q2 and 13.2% to £214m respectively while printed magazine ads dropped by 7.7% to £300m in the six months to July.
The newsbrand adspend fall is nevertheless softer than the average decline over the past four quarters of around 15.2%, according to Warc.
Louise Williams, commercial manager at magazine printer Pensord, says: “We haven’t really noticed paginations dropping but we’re getting feedback from publishers that they’re finding it more difficult to get the advertising to fill the pages.
“But we’re also finding that publishers are more interested in finding advertising that’s a little bit extraordinary, whether that’s six pages or specalised cover finishes. It’s all about return on investment.”
She adds: “Prior to the EU vote we noticed a huge uncertainty and reluctance to do any print projects. Immediately afterwards there was still that uncertainty and, as marketing and advertising tends to be cut back first, it’s not surprising there has been a knock-on effect.
“But advertising and marketing are key, so although you can cut it back, in terms of long-term plans it’s a question of thinking of some more innovative ideas.”
Direct mail also apparently experienced a difficult quarter. The sector had held steady between 2014 and 2015 but was down 13.3% in Q2 this year and Warc is forecasting decreases of 10.6% and 7.3% for the full years 2016 and 2017 respectively, as the fallout from the Brexit vote is anticipated.
The report says “the vast majority” of the Q2 decline was recorded among SMEs that were surveyed independently of statistics provided by the Royal Mail, which are based on its own advertising revenue stream.
It’s unclear from the report how large the SME panel size was or the mail channels the SMEs surveyed were using and is therefore difficult to draw any conclusions from those figures.
Other views
But many direct mail printers we spoke to say they experienced quite the opposite during the survey period, and since.
DST head of creative development Fraser Church says: “We’re really buoyant and are up 17% in the last two years on direct mail volume. Customers are starting to realise that print can get real cut-through in a multimedia environment.
“Sometimes it competes, but it complements digital channels as well, and we’re seeing a lot of that; people are beginning to do multichannel campaigns where they might do a piece of direct mail and then an email to follow up, or the other way round. Clients are getting better responses with more contact across different channels.”
He adds the use of personalisation is also continuing to increase, which is driving additional value for clients, with high-speed inkjet technology advances helping the business to deliver this in larger volumes.
Romax managing director Robin Sumner also believes direct mail is on the up again: “The general feel is that there is a return [to DM] from alternative online routes to market.
“Since June we’ve seen an upturn in marketing activity. We’re constantly wondering if that’s only because Article 50 has not been signed yet but I genuinely don’t think that that will have such a massive impact that people won’t want to market anymore.
“I think people have realised because of the recession that if they don’t continue to do decent marketing then their business will not bring in any income anyway.”
One of the report’s more positive results was printed OOH, which saw advertising spend grow by 0.6% in Q2 compared with the previous quarter to £177m, although it was down by 1.8% year-on-year.
PressOn managing director Andy Wilson believes the growth seen in Q2 will continue: “We’ve seen a flurry of activity from our outdoor media clients in this quarter.
“To a foreign-based company, outdoor media is going to be a lot cheaper than it was pre-Brexit vote because the cost of the media with the weakness of the pound is going to be a more attractive proposition. So I would expect to see a further increase in OOH advertising spend, particularly in this country, as it will become more cost-effective.”
While generally the figures suggest that print advertising is continuing to decline, it also looks as if a plateau could soon be on the way in some sectors as marketers and brands return to print to take advantage of its longevity and tactile nature.
And with more and more people realising that print can be used in an ever-increasing range of creative and complementary ways, ROI will inevitably rise in tandem and it might not be long before print advertising starts to not just survive, but perhaps even thrive again too.
