The figure represents a year-on-year increase of 15.9% compared with the third quarter of 2022, with spend dominated by search and online display advertising, which includes social media.

Spend on search increased by 23.7% in the third quarter, while online display grew by 24.8% year-on-year and TV advertising was down -3%.

Other channels also experienced growth; spend on cinema advertising increased by 21.2% year-on-year, out-of-home ad spend was up 12.9%, while spend on broadcaster video on-demand (BVOD) grew by 28.4%.

The Advertising Association/Warc have revised their projection for ad spend over the whole of 2023 to £37bn off the back of the third quarter figures. Final data for the full year is due to be published in April.

Stephen Woodford, chief executive, Advertising Association, said: “The Q3 increase in 2023 and 2024 forecast upgrade demonstrate advertisers’ continued commitment to investing in their brands, despite the lack of overall growth and stubborn inflationary pressures in the UK economy. The IPA’s latest Bellwether forecast upgrade is further evidence of this, with the strongest improvement in advertiser expectations on total marketing budgets since 2014. Our forecasts indicate the advertising industry is performing better than the wider UK economy, with spend expected to reach £39bn in 2024.”

The Expenditure Report published quarterly by the Advertising Association and Warc includes the AA/Warc’s quarterly survey of national newspapers, regional newspaper data collated in conjunction with Local Media Works and magazine statistics from Warc’s panels. Data for other media channels are compiled with UK industry trade bodies and organisations, including the Internet Advertising Bureau, Outsmart, Radiocentre and the Royal Mail.

The quarterly forecasts are based on Warc’s forecasting model to generate projections for two years based on assumptions about future economic growth.

James McDonald, director of data, intelligence and forecasting, Warc, said: “With the UK’s economy in the doldrums, the online ad sector’s strongest performance in over 18 months – growing five times faster than in key European markets – came as a welcome respite for an ad industry worth a record £37bn overall last year.

“Data show that online retailers more than doubled their online advertising spend during the third quarter, as pricing became competitive and brand salience paramount when attracting stretched household budgets. Our expectations for 2024 are now brighter on the tailwind of a strong end to last year and positive sentiment across the marketing and wider business sectors.”