The figure of £17.2bn represents a fall of 0.4% in real terms on the 2002 figure according to the Advertising Association, which has published the figures compiled by the World Advertising Research Centre.
Outdoor and radio performed strongly during the year with outdoor up by 10.4% to £901m while radio was up by 6.8% to £583m.
Television expenditure, which remains the second largest area of adspend, was up in nominal terms by 1% to £4.37bn but down by 1.9% in real terms.
However Andrew Brown, director-general of the Advertising Association, said he believes that television can recover.
He said: "The 2003 figures are influenced by a number of factors. An economically resurgent BBC; fragmentation; and debates over the single ITV don't help. ITV is now much more focused and should have a more competitive year."
Cinema also saw a fall, down from £180m in 2002 to £173m in 2003, although the Advertising Association said that over the last 10 years its average growth rate had exceed that of all traditional media.
Internet advertising looks set to exceed growth in all other sectors by a vast amount, with the AA estimating growth of 61.6% to £376m.
Most of the advertising industry is predicting that 2004 will see a return to solid growth rates, with 50% of companies looking to increase ad budgets this year.
Brown said: "The feel is that this year we will see a growth figure that exceeds inflation."
Sir Martin Sorrell, chief executive of the WPP Group, has been forecasting an advertising recovery in 2004 for some time, based on increased adspend surrounding the Olympic Games in Athens, the US Presidential elections and the Euro 2004 football championship in Portugal.
The figures are to be published in full this June in the AA's Advertising Statistics Yearbook, priced at £160.
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