Advertising revenues forecast to fall

Advertising revenues in the UK will fall by nearly 3 per cent in real terms this year, the Advertising Association said on Tuesday.

Growth in the first quarter of the year was slower than forecast at 1.7 per cent across all media compared with the previous forecast of 2.9 per cent, the association said.

Television and internet advertising grew quickly, according to the new data, with increases of 9.4 per cent and 7.2 per cent respectively, but this was countered by slowdowns in newspaper, magazine and radio sales.

The Advertising Association and Warc, the marketing research group, reduced their predictions for growth in the sector in the whole of 2011 from 2.9 per cent to 1.4 per cent.

Suzy Young, Data Editor at Warc, added: “In real terms, after adjusting for inflation, total ad spend is actually set to decrease nearly 3 per cent in 2011. However, next year should see a real terms increase of around 2.5 per cent.”

The two organisations attributed the worsening figures to decreases in disposable income for consumers and their confidence about the future. However, they forecast 5.4 per cent growth across the UK advertising market for 2012, spurred by the London Olympics.

Many media companies are heavily affected by movements in advertising spending, notably free-to-air broadcasters such as ITV, Channel 4, Channel 5 and Global Radio, as well as newspaper groups such as Trinity Mirror and Johnston Press.

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