WPP Predicts e-Stampede by UK Consumer Brands,

23 November 2006

LONDON: GroupM, the holding vehicle for WPP Group's media buying and planning assets, has peered into its crystal ball for 2007 and sees . . . a massive 36% increase in UK online expenditure. Attributable, it says, to growing acceptance of the medium by FMCG [fast moving consumer goods] marketers.

In June GroupM's ball foresaw a skimpy increase of just 26%, but was wrong-footed by the near-nuclear reaction of the e-herd instinct.

Brand advertising is expected to move out of traditional media, in the hope that its advertising pound will "work harder" online. Currently FMCG accounts for just 5% of online ad investment, but GroupM believes this could rise to 13% next year.

But the report, This Year Next Year UK, published Tuesday, warns that the trend is likely to benefit no-one but the cybermen.

"Every pound withdrawn from traditional media, either to be saved or spent online, where supply is in handsome surplus, exerts more deflationary pressure on the total market," says the report. "And if online proves more productive, advertisers have the option of investing less."

Group M accordingly downgraded June's current year expectations from a 2% increase in media ad revenues to just 1%.

As to the overall UK advertising market in 2007, the WPP company sees a 5% increase, driven entirely by online growth and the upcoming sponsorship bazaar for the 2012 Olympic Games.

Data sourced from Media Week (UK); additional content by WARC staff