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AA Downscales Its 2005 Ad Expenditure Forecast

AA Downscales Its 2005 Ad Expenditure Forecast

The Advertising Association has revised downwards its advertising expenditure forecast for 2005 from 4.9% to 4.4%, as signs of weakening consumer confidence takes hold, which could suggest a slow down in economic activity.

As previously forecast, internet advertising is expected to be the fastest medium, however, expectations have been down-scaled since July’s update which predicted a 50% increase over 2004, to just over 30%.

The Advertising Forecast report, which is compiled by the World Advertising Research Center, said significant gains are also expected from the cinema and outdoor markets, but again these have both seen forecasts reduced to 8.2% and 6.9% respectively.

Annual Change In Advertising Expenditure By Medium 
   
  2005 On 2004 % Change (Constant Prices) 
National Newspapers 3.8
Regional Newspapers 3.7
Consumer magazines 3.5
Business Magazines 2.3
Total Press 3.5
– of which display  3.8 
– of which classified  3.2 
Television 1.9
Radio 4.1
Outdoor 6.9
Cinema 8.2
Internet 30.3
Direct Mail 3.6
   
Total Including Internet 4.4
Total Excluding Internet 3.4
Source: AA’s Advertising Forecast, September 2004 

In comparison, Carat, the world’s largest independent media agency network, has said that ‘solid recovery’ in Europe and the US has led to an increase in its advertising spend forecasts for 2004 and 2005, despite the Olympic Games failing to provide the significant uplift expected (see Carat Revises 2004 & 2005 Adspend Forecasts Upwards).

However, Carat’s update failed to specify on the UK’s position in 2005 by saying, a ‘softer housing market could suggest that economic activity could slow down a little further ahead’. Meanwhile the group’s 2004 advertising spend forecast was revised upwards to 4.6% as a result of an increased GDP figure of 3.4%.

Related Links
Advertising Association
World Advertising Research Centre
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