PARIS: French TV advertising spend could fall by much as 7% in the third quarter of this year, a report has shown.

In new research, investment bank Morgan Stanley noted that some TV campaigns that had previously been frozen were now being cancelled entirely, Advanced Television reports.

The bank said its contacts expected a decline of between 5% and 7% for the three months to end-September 2012.

Separate figures from Warc's International Ad Forecast, released in June 2012, suggest that TV spending in France will rise by +0.7% in 2012.

Warc also reduced its all-media adspend growth forecast for France in 2012 from +0.8% to +0.6%.

In its report, Morgan Stanley said that a "robust" July in terms of TV spend had been followed by a “dismal” August and that cancellations starting to come through in September.

Particular sectors were singled out for shrinking budgets, including food, telcos, beauty products and cleaning products.

The bank added that it not optimistic about the immediate future, with advertising agencies expecting further cuts in the fourth quarter.

External factors likely to depress adspend further include a toughening regulatory environment and the launch of six new digital terrestrial channels in France in December, which could increase competition between broadcasters and put extra pressure on prices.

"Agencies are worried about the negative impact of upcoming tax increases on 2013 advertising budgets," the report added. "Tax increases will hurt the purchasing power of the French consumer as well as corporate profitability."

Data sourced from Advanced Television; additional content by Warc staff