ABN AMRO has downgraded its full year forecast for UK media from 0.4% to -1.6% in response to data from AC Nielsen MMS indicating that during June the market slipped 13.7% year on year. The research and analysis group says its revised forecast reflects “the increasing likelihood that there will be no significant second half recovery.”
ABN points out that June last year saw advertising grow by more than 17% yoy. “This was a tough comparable.” it stated, “But it was no tougher than that faced in April, when UK advertising growth was 10%. This gives some indication of the scale of the deterioration of the UK ad market.”
The data from MMS which has prompted this negativity indicates that TV and newspaper display advertising have been the most significant victims of the recent declines with the former seeing a 16% decline in June, translating to a 13.1% decline for the quarter. The latter saw a 16.3% decline during June, giving a 13% fall for the second quarter of the year. Only magazines bucked the downward trend, staying flat for the quarter and dropping just 0.8% for June, buoyed perhaps by the high profile launch activity in the women’s lifestyle sector.
The report by ABN went on to say that data on July and August will be key in determining whether it has been too quick to dimiss the market’s chances for the rest of the year, or alternatively whether further deterioration will occur.
Nevertheless, ABN has forecast that the market, with the exception of TV advertising, to turn positive in August, with TV following in September. “We expect all of the major media to show limited YOY change thereafter, with TV outperforming the rest of the market, partly because of its comparative weakness in Q4 2000.” was the conclusion.
