MADRID: Trading conditions are gradually improving in the Spanish advertising market, but the long-term outlook is likely to remain challenging.

According to the latest poll of senior executives conducted by Zenith Media, adspend in the country is set to fall by just 1.6% in July, which would be the smallest contraction recorded this year.

When assessing the economic climate, participants delivered an index rating of –22.2 points, the strongest total since December 2007.

The panel awarded the current situation of the advertising sector a score of –6.2 points, which had declined from the previous round of research undertaken by Zenith.

More positively, television expenditure was found to have expanded by 10.3% in May, with digital stations proving of particular interest.

Rising prices also contributed to this trend, as the amount of inventory available through TVE, the state-backed broadcaster, has decreased significantly in line with recently-introduced official regulations.

Elsewhere, a range of new media channels generated rapid growth, with the investment in blogs having climbed by 11% in the last two months and 34% from January, to €7.9m ($10.3m; £6.6m).

Social media budgets jumped by 19% compared with figures released in May and 72% on January, reaching €16.5m.

Online video is now responsible for €11.1m of marketers' outlay, and this form of communications is due to gain further ground in the future.

Having posted an uptick of 11.5%, mobile is also attracting greater numbers of brand owners, although this medium's returns are still modest.

Overall, it was predicted that the financial crisis in Spain will endure until the second quarter of 2011 at the earliest.

Data sourced from Cine Y Tele; additional content by Warc staff