UK Christmas 2023 Ad Spend Expected to Reach Record Highs

Advertisers are poised to unleash a £9.5 billion advertising blitz, marking a significant 4.8% increase from the previous year's record-setting expenditure of £9 billion. This substantial rise in ad spend underscores the enduring significance of advertising in driving economic growth during the holiday period.

The anticipated surge in advertising activity is driven by a confluence of factors, including the continued popularity of online shopping, the increasing influence of social media platforms, and the growing prominence of streaming services. As consumers increasingly embrace digital channels for their festive shopping and entertainment needs, advertisers are adapting their strategies to reach these audiences effectively.

The report highlights several key findings that paint a picture of the advertising landscape during the Christmas season:

• Broadcast Video on Demand (BVOD): BVOD, which encompasses streaming services like Netflix, Amazon Prime Video, and Disney+, is expected to witness a substantial 20.2% surge in spending during the fourth quarter compared to the same period last year. This growth is attributed to the increasing popularity of streaming services and their ability to deliver targeted advertising to viewers.
• Out-of-home (OOH) and Online Display Advertising: OOH and online display advertising are also poised for significant growth, with predicted increases of 10.3% and 9.1%, respectively. OOH advertising, which includes billboards, posters, and other forms of advertising seen outside the home, is expected to benefit from the rise in consumer foot traffic during the holiday season. Online display advertising, which encompasses banner ads, video ads, and other forms of digital advertising, is expected to continue its upward trajectory driven by the increasing adoption of mobile devices and the growing popularity of social media platforms.
• Internet Continues to Dominate Ad Spending: The Internet remains a crucial platform for advertisers, with four out of every five pounds now being spent on online advertising. This reflects the shift in consumer behaviour towards digital platforms and the effectiveness of online advertising in reaching target audiences.
• Television Advertising Remains Significant: Despite the rise of digital advertising, television advertising still holds considerable value, with a predicted spend of £1.5 billion during the fourth quarter. This suggests that television remains an effective medium for reaching a large audience and creating brand awareness during the holiday season.

Further research conducted by the AA for this year's Christmas advertising season revealed that nearly half (48%) of all adults credit Christmas ads with helping to spark gift ideas. This highlights the power of Christmas advertising in influencing consumer purchasing decisions. Additionally, 70% of young adults (25-34) find Christmas ads to be the ultimate festive mood booster, demonstrating the emotional impact of Christmas advertising and its ability to connect with consumers on a deeper level.

The expected record-high ad spend during the Christmas season in the United Kingdom underscores the continued relevance of advertising in driving consumer engagement and influencing purchasing decisions during the festive period.

Advertisers are leveraging a diverse range of channels, including BVOD, OOH, online display, and television advertising, to reach their target audiences and create memorable campaigns that resonate with consumers. The emotional impact of Christmas advertising and its ability to spark gift ideas and enhance the festive mood further emphasize the significance of advertising during this special time of year.