Internet Snatches UK National Newspapers' Adspend

31 May 2006

Online advertising is set to overtake national newspapers this year as the UK's third biggest medium by spend.

A report from WPP Group's media planning and buying arm GroupM also predicts the internet will be snapping at the heels of the number two medium - regional newspapers - by the end of 2007, but will not in the foreseaable future challenge television's number one position.

GroupM, which includes in its stable MindShare and Mediaedge:cia, estimates that online will take 13.3% of the total media advertising market this year, compared with national newspapers' 13.2%.

Says Adam Smith, futures director at GroupM: "Every year people think the internet must slow down because the growth rate looks high but it keeps going. Overtaking national newspapers is another milestone."

The forecast 39% rise in internet advertising contrasts with a 9% decline in national newspaper ad revenue. GroupM predicts that by the end of 2007, national newspapers will have seen their share of advertising fall to almost two-thirds of 2000 levels.

Newspapers have responded by investing in their own websites and buying, often at great expense, online classified advertising businesses. However, declining ability to reach sought-after younger readers is still a concern.

The report also has worrying tidings for the UK's largest commercial broadcaster ITV. It predicts the company's flagship channel, ITV1, will see an 11% decline in ad revenues this year.

Although many large advertisers continue to invest in commercial TV's large audiences, others have stayed away as viewers gravitate across more channels.

Rival media buyer ZenithOptimedia, owned by French marketing services group Publicis, in contrast forecasts that UK TV revenues before adjustment for inflation will grow by at least one per cent each year between now and 2010.

Data sourced from Financial Times online; additional content by WARC staff