LONDON: The outlook for the UK advertising market in 2010 has improved markedly, according to the latest AA/Warc Expenditure Report.

In February, adspend was not expected to return to growth until the third quarter of this year, but revenues are now predicted to rise throughout 2010, equating to an annual increase of 2.3% at current prices.

A free summary of the new AA/Warc Expenditure Report, including PowerPoint charts, is available here.

Within the overall 2010 adspend figure, display advertising is forecast to account for £10.4bn ($16.0bn; €11.9bn), with classified advertising on £3.9bn and recruitment advertising on £600m.

Adspend budgets will jump by a further 5.1% in 2011 to £15.6bn, although this total spend figure would still be below the level recorded in 2004.

According to the figures compiled for the Advertising Association by Warc, online will enjoy growth of 7.9% in 2010 and 9.2% in 2011. The web is also set to take almost two thirds of classified revenues by the close of this year.

UK television advertising will experience improvements of 3.7% in each of these two years respectively, with the FIFA World Cup in South Africa one factor contributing to this trend in the first half of 2010.

The UK industry's return to growth in 2010 will follow a decrease in UK total adspend revenues of 12.4% at current prices in 2009 as measured by the AA/Warc Expenditure Report. The latest figures show that the rate of decline was already slowing down in the fourth quarter of last year.

"It won't surprise anybody that the industry has had a tough year," Tim Lefroy, chief executive at the Advertising Association, said.

"But as confidence returns, it is clear that forward-thinking organisations are stealing a march on their rivals by investing in advertising."

Suzy Young, data editor at Warc, said: "Structural challenges, particularly with print media, remain and the recovery is fragile. But for advertisers, agencies and media alike, the prospects for 2010 look considerably brighter."

For 2009 as a whole, recruitment advertising saw figures fall by 42% to £700m, with other classified ads down by 2.3% to £3.7bn and display off by 13% to £10.1bn.

At constant prices - which adjust for inflation -adspend fell by 14.3% to £13.1bn in 2009, with totals likely to be flat in 2010 and increasing to £13.5bn in 2011 in these terms.

Data sourced from Warc