A Tale of Two Trends

In terms of how advertisers in the UK will allocate their digital budgets, 2020 will be a story of two trends. On one hand, digital ad investments (and advertising investments overall, for that matter) by some sectors will decline immensely as a result of those industries facing insurmountable barriers. On the other, the pandemic will allow certain other industries to remain resilient on the digital ad spending front, with relatively strong growth forecasts for the year.

It comes as no surprise that the automotive and travel industries will experience huge spending declines in 2020. As the UK imposed strict lockdown rules, pretty much all travel was nixed for several months. Investment in digital advertising by these two industries will thus suffer, with spend declining by 20.4% for auto and by 36.7% for travel this year.

At the opposite extreme, computing products and consumer electronics have been in high demand as UK consumers bunker down and spend extended periods of time on remote work and indoor leisure activities. As a result, this industry will see digital ad spending grow by 14.3% this year, up from 13.2% in 2019.

Other industries that we track, meanwhile, will prove to be resilient in the face of the economic downturn. While we expect rates of digital ad spending growth to decline slightly across the board, all these categories will nonetheless post positive growth in 2020, with retail and financial services both growing by nearly double digits.

All this will produce a slight rebalancing of the world order as it pertains to digital ad spend. Retail will continue to lead the pack and account for a fifth of total digital ad spend in 2020. Computing products and consumer electronics will see a significant bump in spend, elevating its share to 10.6% and positioning it in the middle of the pack. And travel and automotive will slip down the rankings, with travel in particular seeing a significant decline and holding onto just 6.8% of the total digital ad market.

A large proportion of digital ad spend will come from the “other” category, which contains industries that are sizable but not yet broken out individually in our UK forecasts (like healthcare and pharma, real estate, education, and business and industrial).

In pure monetary terms, spend in the UK digital ad industry will fall into three bands in 2020:

• Retail spend will be far out in front, reaching £3.02 billion ($3.85 billion) this year, almost a billion pounds ahead of the second-largest spender, CPG.
• Travel spend will prop up the list at £1.03 billion ($1.31 billion) and account for just over a third of the retail total.
• In between will be the remaining industries we track, with less than half a billion pounds’ difference in their digital spend overall. That difference would be even smaller were it not for automotive’s spend dropping so substantially this year.