The Advertising Association’s (AA) forecasting skills have today been criticised by IPC Media, warning that the industry body’s advertising expenditure predictions could be misleading.
Questioning the Association’s ability to make accurate forecasts, in a letter written to Media Week, Christina Hartley, IPC’s group ad marketing director, says: “The latest 2005 figure for the sector [consumer magazines] is a growth of 4.1%. For those of us in the magazine medium, this is, at first glance, an encouraing piece of news. However, having tracked the AA predictions for magazines closely over the past few years, the top-line figure should not be taken as read.”
Hartley goes on to explain: “For example, in March 2003, the AA forecast consumer magazine growth for 2004 to be at 4.8% and a year later this had increased to 6.5% – good news all round seemingly. However, the latest output (which does not include a closed fourth quarter) is back to 4.2% – and is likely to drop further when the actuals come through in a couple of months.”
IPC said that predictions for the consumer magazine sector for 2004 were all over the place, noting that, in March 2003 the AA forecast that adspend in the sector would grow by 4.8% in 2004. A year later this projection had increased to 6.5%, but closed with a final figure of just 4.2%.
As a result of the AA’s widely varying predictions, the IPC has made a rallying cry for a more accurate and robust prediction of advertising revenue performance.
In responding to IPC’s claims, Colin Macleod, research director at the World Advertising Research Centre (WARC), explained that some variation between forecasts is always expected. However, Macleod maintained that the forecasts for 2004 would prove to be close when the figures are released in March.
While media agencies agree with IPC, saying that the data is not reliable enough, the AA forecasts are not viewed as particularly relevant for planning purposes.
Earlier this month, the AA released its forecasts for 2005 UK advertising expenditure(see UK Adspend Forecast To Rise By 4.2% In 2005), expecting total ad revenue to rise by 4.2%, with consumer magazines predicted to grow by 2.2% on 2004.
| 2005 UK Advertising Forecasts By Medium |
|
| Medium |
2005 on 2004 % Change (Constant Prices) |
| National newspapers |
2.7 |
| Regional newspapers |
2.9 |
| Consumer magazines |
2.2 |
| Business magazines |
1.8 |
| Total press |
2.6 |
| – of which display |
2.4 |
| – of which classified |
2.9 |
| Television |
2.5 |
| Radio |
4.5 |
| Outdoor |
6.2 |
| Cinema |
4.8 |
| Internet |
38.1 |
| Direct Mail |
2.9 |
| |
|
| Total including internet |
4.2 |
| Total excluding internet |
2.9 |
| |
|
| Source: Advertising Association, January 2005 |
|
