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UK adspend may show a worse than expected decline in the run-up to Christmas, with revenues expected to fall 10.5% year on year to £6.2bn in the three months to December, the latest Advertising Association/Warc Expenditure Report has warned.

The previous forecast, released in July, predicted Q4 would be down 6.7%, on hopes that the coronavirus pandemic would have eased by the Christmas quarter – the most important of the year.

In what the report paints as a dire picture for the industry, AA/Warc has also downgraded its 2021 forecast of a return to growth to 14.4%, lower than the previously predicted 16.6%.

"Growth in 2021 will fall just short of offsetting this year's losses completely, meaning the UK's ad market is now not expected to recover fully until 2022," it said.

The figures are not surprising as many brands continue to be cautious with their spending. ±±¾©Èü³µpk10 reported this week that Marks & Spencer will not be running a clothing Christmas TV campaign. 

James McDonald, head of data content at Warc, added that the increased lockdowns around the country because of the second wave of Covid-19, a possible no-deal Brexit transition and rising unemployment are all having an impact on adland.

AA/Warc also noted that UK adspend dropped 33.8% in the second quarter of the year – the height of the coronavirus lockdown. It had previously expected a 39% fall.

"This was the worst-ever quarter recorded for the UK's advertising industry and contributed to a 14.9% dip over the first half of the year, equating to a loss of £2bn when compared to the same period in 2019," the report explained.

For 2021, there are some positive notes as cinema adspend is set to rise by 138.3%, outdoor by 57.1%, regional newsbrands 16.2% and magazine brands 18.8%.

Stephen Woodford, chief executive of the Advertising Association, said: "These stark figures demonstrate the strain that all parts of the advertising ecosystem were under during the second quarter. Large parts of our industry and the wider economy were effectively shut down.

"Events of recent weeks have shown this will be no straightforward recovery as different parts of our country enter or leave local conditions at varying speeds.

"We must boost growth and support jobs through an advertising tax credit and a skills programme to aid colleagues facing unemployment. It is essential that our workforce, business, and government work together on the recovery plan for our industry and our country."