01 February 2000

A BARRAGE OF TV and national press advertising by so-called dot-com companies is expected to make a substantial contribution to a forecast 4.1% upsurge in UK advertising this year - lifting total spend to a record £9.5bn. Or so predicts Zenith Media, barring economic upsets. Based on current bullish levels of consumer confidence and anticipated economic growth, the rise and rise in ad spend is expected to be fuelled by continued big-buck advertising by internet companies, eager to drive traffic to their sites and fulfil the revenue forecasts on which their business plans and investment strategies depend. Zenith's crystal ball-gazing includes only traditional media - direct marketing, sponsorship, events, promotions and internets ads are excluded from the forecast.

The latter is predicted to more than double this year in the UK, from £54.5m to £113.04m. But despite this exponential growth, net ads will equate to a mere 1.16% oconventional ad spend. From 2001, Zenith believes, the growth rate will slow to 30% and 23% in 2002. In the longer term, classified advertising on the internet is seen as the main threat to traditional media, although the promotion of new media in old may re-sult in 'traditional media ... gaining more than they lose, at least at first'.

Scandinavian-based Letsbuyit.com plans to spend over $100m (£62.5m) this year as the newly-launched on-line retailer battles for its place in the cyber-sun. According to global marketing director Soames Hines, the company has just completed its third round of funding and claims sufficient resources to underpin its growth plans until mid-2000 at least. Thereafter, it will decide whether to seek additional funding via a rights issue or a public flotation. Abbott Mead Vickers BBDO has been appointed to handle the business in Europe (accounting for some $35m-$40m of spend) with the residuum allocated to rollout in the US, Latin America and the Pacific Rim.