UK adspend to rise

26 November 2010

LONDON: Advertising expenditure levels should rise by nearly 8% in the UK this year, according to a forecast.

The "This Year, Next Year" report published by GroupM, WPP Group's media arm, predicted ad revenues would rise 7.7% in 2010 and 3.6% in 2011.

This marks a considerable advancement on December 2009, when the organisation anticipated "zero growth" ahead due to difficult economic conditions.

By medium, television has enjoyed a 14% improvement in the opening ten months of 2010, the greatest increase overal.

TV spend is also forecast to expand by 4% in 2011.

Brand owners across almost every sector have boosted their investment via this channel, encouraging GroupM to raise its projections from the 11.6% increase outlined in June.

"TV's broad-based recovery has drawn in all categories except motors, which marked time on TV between January and September while diverting new money to just about every other medium," it said.

"We revise our TV number up again to 14%, right at the top of even recent expectations."

Outdoor recorded a 13.9% increase during the first three quarters of the year, measured against the internet's 9.8% and national newspapers' 6.6%.

More specifically, GroupM stated national newspapers had made "excellent" progress, aided by strong demand from retailers, up 14.4%, and media and entertainment, up 14%.

Expenditure among the largest press titles should rise by £100m in 2010, hitting £1.4bn, before moderating to 2% in 2011.

Total display advertising, which delivers approximately 85% of national newspaper returns, is likely to leap by 9% this year.

Elsewhere, mobile was pegged to register a 46.3% surge on an annual basis in 2010, followed by a further 45.5% jump in 2011.

Smartphones such as Apple's iPhone will drive this trend.

Retail, food and beauty brands have been the primary contributors to overall growth, with media and entertainment, automotive and finance, lifting their outlay along the average.

Looking forward, GroupM warned tax hikes and declining household budgets suggest conditions could be more difficult in 2011.

"Our best hope for ad growth is the willingness and ability of UK plc to invest ahead of recovery," said Adam Smith, GroupM's futures director.

"Top-line growth now depends on innovation and restoring investment, and marketing is one of these levers.

"This cannot compensate for a lack of full-throated consumer recovery, but if marketers elect to advertise, it would be enough to keep media investment growing in 2011, even if the economy grinds to another halt."

Data sourced from The Guardian; additional content by Warc staff