UK Advertising Growth Hit By World Cup
Carat, has lowered its forecast for UK adspend growth from 4.5% to 3.2% for 2006 in its Global Market Update. The European forecast as a whole was down, which Carat said was because of both the fragile Italian economy and the UK market, where the expected boost from the World Cup has not materialised.
Internet advertising is continuing to perform well, and is boosting overall spend with a 25% year-on-year increase globally in 2006. In the US, online advertising is expected to overtake newspapers by 2008, and will overtake magazines in the UK this year, after beating outdoor in 2005. Recent research from TNS predicted US adspend will increase by 13% in 2006 (see US Internet Adspend Predicted To Increase By 13%).
The report predicts that in Sweden and South Korea, early adopters of the internet, online will become the third biggest advertising medium this year, after TV and newspapers.
Back in the USA, television expenditure is this year on course for 4.3% growth boosted by cable markets, Spanish channels and the build up to hugely important Congressional elections in the autumn. The launch of the CW network (a merger of WB and UPN), My Network TV and downloaded TV programmes are also expected to have a positive impact on advertising spend.
The report also mentioned that Nielsen recently reported daily TV viewership per US household reached an all-time high in 2005 of 8 hours, 11 minutes.
Carat’s forecast for Asia Pacific has also been revised down slightly, mainly as a result of slower than expected Japanese growth, with advertising yet to benefit from the healthy economy.
The 15th Asian Games, in December 2006, should provide a boost to the rest of the region, while China and India’s advertising markets are buoyant and South Korea is starting to recover. In addition, a study by ZenithOptimedia predicts that China will be the the fifth-largest ad market in 2008, up from seventh position in 2005 (see Global Adspend Forecast To See 6% Growth In 2006).
Robert Lerwill, chief executive of Aegis Group plc, owners of Carat, said: “2006 is shaping up to be a pretty solid year in the majority of markets around the world and global advertising expenditure is expected to grow by 5.7% worldwide. Country factors aside, there are a couple of clear themes across the board this year. The World Cup, as we’ve always said, provides a mild positive. But it doesn’t change the game.
“The rise of digital, on the other hand, cannot be understated. It will endure long after the final whistle has blown in the Berlin Olympiastadion. Digital is driving growth in almost every single market, transforming the marketing landscape in the process. Investment in digital media has now definitively moved from ‘experimental’ to ‘essential’.”
| Year on year % growth at current prices | |||
| 2005 (a) | 2006 (e) | 2007 (f) | |
| Global | 5 | 5.7 (5.8) | 5.5 |
| USA | 4 | 5.0 (5.0) | 4.7 |
| Asia Pacific | 6.3 | 6.4 (7.2) | 6.8 |
| Japan | 1 | 1.0 (3.0) | 1.5 |
| China | 21.3 | 20.5 (20.0) | 20.6 |
| Europe | 4.5 | 4.5 (4.8) | 4.2 |
| UK | 5.5 | 3.2 (4.5) | 4.6 |
| Germany | -0.5 | 2.1 (2.0) | 1.5 |
| France | 2.5 | 2.7 (2.3) | 3.5 |
| Italy | 3.1 | 3.4 (4.7) | 3.1 |
| Spain | 5.1 | 4.6 (4.6) | 4 |
Figures in brackets show previous forecast, issued in September 2005