Warc cuts UK ad forecast

21 June 2011

LONDON: Concerns over the economic recovery will lead to lower-than-expected UK adspend growth, according to the latest AA/Warc Expenditure Report.

The new report, which can be browsed by subscribers here, indicates that expenditure will increase by 1.4% for 2011 at current prices - down from the previous (March 2011) prediction of 2.9% growth.

In Q1 2011, adspend grew by 1.7% from the previous year, with strong contributions from online (7.2%) and TV (9.4%) cancelling out sharp declines for press, radio and cinema.

By product category, services increased its share of total UK adspend to 19%, while consumables - the largest category - reached 20%.

Durables, financial and industrial adspend also gained share over the three-month period.

But government dropped 3.4pp to a share of 5%, as the public sector pared spending on marketing initiatives.

The sector is forecast to reduce spend by almost 15% in 2011, as part of the government's deficit reduction scheme.

Meanwhile, the internet is set to gain share in both display and classified advertising.

By the end of Q1, online accounted for 72.1% of classified ads and 10.1% of display.

Regional news will be the biggest loser, with its share of display adspend dropping 0.6pp and its classified share off 2.7pp.

AA/Warc's ad forecast for 2012 was unchanged at 5.4% growth in the latest report.

This suggests that the UK will avoid a double-dip recession - and the London Olympic Games will make a positive contribution to adspend.

Data sourced from AA/Warc