UK TV Ad Market To Grow
The latest edition of ZenithOptimedia’s UK Television Forecasts to 2012 predicts that the television ad market will stop shrinking this year, and start growing again – if at a modest 2% a year – in 2008.
Television will however grow for only 1%-2% a year for the rest of the forecast period, and its market share will decline from 27.2% in 2006 to 22.7% in 2012 says Zenith.
At the end of 2006 78% of UK households received digital television on at least one set. Zenith forecasts this proportion to rise to 88% by the end of this year, and to reach 100% in 2010, two years before the analogue switch-off date.
It adds that E4, More4 and Film4 should more than make up for a 2% decline in Channel 4’s revenues in 2007: it expects the ad revenues received by the whole group to grow by 1%.
Five Life and Five US are predicted to do the same for Five, turning a 3% drop in revenue at the main channel to a 2% increase for the group as a whole.
ITV’s four digital channels are not growing fast enough to make up for ITV1’s decline, however: it forecasts ITV1’s ad revenues to shrink by 7% in 2007, and revenues to shrink by 4% across all the ITV branded channels.
Television is now extremely cheap after years of weak demand and fast-expanding supply, with the switch to digital expanding the supply of commercial impacts because digital households watch more commercial television, and digital channels are allowed to sell more ads than their analogue counterparts.
In 2006 the average adult CPT was at its lowest since 1995, and 19% lower than it was at its 2000 peak. After adjusting for inflation, airtime is now at its cheapest since the early 1980s. Prices fell by 6.5% in 2006 and Zenith expects them to fall another 1.4% in 2007, at which point they should stabilise as the growth of impacts tails off.
A recent forecast from GroupM predicted that UK adspend will grow 2.6% this year, totalling £26 billion, and 3.1% next year.
A recent report from Understanding and solutions forecast that Internet TV advertising could achieve revenues of up to $10 billion worldwide by 2011.
ZenithOptimedia: http://www.zenithoptimedia.com/