Carat’s Media Forecast

Display advertising in Western Europe has increased at a rate of 11.4% between 1980 and 1990, but Carat International forecasts that this rate of increase will decline to 7.5% this year and 9.5% next year (2.7% and 5.4% respectively in real terms).

The predictions come in Carat’s new Media Forecast, covering Western Europe, which will be updated every six months. The report cites the growth in tele- vision as the key trend in the market since 1980. From 17.5% of display advertising in 1980, its share rose to 28.8% last year. Carat forecasts a further increase to 32% in 1992.

Television expenditure grew by an annual rate of 17% between 1980 and 1990 and is now expected to grow by a further 13% and 14.5% (7.6% and 9.9% in real terms) in 1991 and 1992.

Press has seen its share of ad revenue drop from 70% in 1980 to less than 60%. Total revenues, however, increased substantially over this period, by around 158%.

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Amongst the individual countries, one key change that it forecast is that Spain will overtake both the UK and France as the second largest market after Germany. In France economic growth has slowed down of late, although no recession is forecast and activity is expected to accelerate by the end of the year. The advertising market is forecast to grow by 3% in real terms this year, and by a further 5% in 1992.

TV deregulation has now taken effect but there is a continued ban on retail advertisers using TV.

In Germany, television enjoyed a market share of only 13% when private TV first emerged in 1985; its share now exceeds 18% of the market. By 1992, Carat expects this to have risen to a 27% share.

Ad expenditure in the west of Germany is slightly down on 1990 so far this year, because some money is being transferred to eastern Germany.

In the Netherlands, the deregulation of TV has been the key feature of the media market over the past two years.

The launch of RTL-4 at the end of 1989 had an immediate effect on the market, and after fifteen months it enjoyed a revenue share of almost 50% against the three state channels.

The press is likely to come under increasing attack from the audio-visual sector by the end of 1991.

Spain remains one of Europe’s fastest growing economies, and one of its fastest developing consumer markets.

The state TV monopoly was broken in 1990 by the launch of three private channels, and 1991 has seen the launch of Spain’s first popular daily news- paper.

During the first quarter of 1991, media revenues grew by 11.8% compared with last year.

In the UK in the past year all the economic variables relevant to advert- ising – consumers’ expenditure, retail sales, profits and job vacancies – have been on the decline.

The majority of economic forecasts now suggest that there will be a recovery by the end of this year, with an implicit resumption in advertising growth for 1992.

Carat International: 071 730 0010