UK Adspend Declines For The First Time In 10 Years

New figures from AC Nielsen MMS to be published next week indicate that UK adspend has fallen in real terms for the first time since the recession of the early 90’s. In the period to November 2000, spending rose by just 2.8% – below the headline rate of inflation, 3.2%.

Whilst some sectors such as technology and financial services showed a strong performance, spending fell across most other markets. One possible reason for the decline is the rising cost of buying TV airtime which has caused many big name advertisers to seek out alternative forms of advertising such as using the internet or sponsorship deals to market their products.

As A.G. Lafley, president and chief executive of the Procter & Gamble Company, said whilst unveiling the company’s long term growth plan last September, “We are moving onto the internet in a big way. We’re making it part of everything we do. The benefits touch every part of P&G’s business.”

According to AC Neilsen MMS, spending on television advertising grew by 6.8% in the period January to November last year, radio was up 5.5% and press up 4.1%. The decreases came in cinema where spending fell by 7.8% and outdoor, where figures suggest spending fell by 31.2% echoing figures from CIA MediaLab at the end of last year (see Outdoor Adspend Drops And Entertainment Is Biggest Spender Say CIA MediaLab Findings).

If December figures corroborate these trends, bearing in mind the tendency to use adspend as an indicator of confidence in the economic outlook, it will surely lead to nervousness about a possible slowdown in the economy.

AC Nielsen: 01865 742742