Strong UK company profitability will act as the biggest boom to advertising spend in 2007, according to a new forecast from OPera Media.
It adds that on-trend GDP growth will mean modest growth in display advertising expenditure, at 1.7% for 2007.
Strong increases from the online search and classified sectors will see total advertising spend increase by 3.0% for the year ahead.
The television, press and radio markets will continue to lose share of advertising spend in 2007 according to OPera, whilst growth in display revenues will come from both cinema and out-of-home.
However, online will contribute the majority of next year’s expenditure increase, as it did in 2006, says OPera.
In television, revenues are predicted to decline by 2.9% for the year ahead, with the digitisation of the UK television market creating deflationary pricing, leading to a reduction of budgets.
Overall, OPera says that commercial supply is expected to increase again in 2007, by 2.5%. ITV revenues are predicted to decline sharply again, in the region of 8%. In 2007 commercial supply is once more expected to originate from multichannel stations.
In press, the red tops and the Express are forecast to struggle with circulation, whilst the qualities and the Associated publications will stay stable whilst increasing cover price. National press revenues are predicted to be down 1.2% in 2007.
Meanwhile, online advertising expenditure is predicted to increase by 27% in 2007, from an estimated 45% increase in 2006.
Out-of-home revenues are predicted to rise by 5% for 2007, with out-of-home digital supply increasing significantly across 2007 and 2008.
Radio revenues are predicted to decline by 2% in 2007, with digital radio listening predicted to account for 22% of total radio listening in 2007, up from 16% in 2006.
Radio non-spot advertising will account for 25% of national revenues in 2007, according to OPera.
In cinema, 2007 will see admissions rise by 9%, driven by a number of blockbuster sequels in the summer, with advertising revenues rising 4% on the back of strong admissions.
A report from Group M at the end of November revealed that the UK is Europe’s slowest-growing major ad market in 2006 and, were it not for the internet, would also be in 2007 (see UK Is Europe’s Slowest Growing Major Ad Market).
Meanwhile, Group M have forecast that global advertising growth is set to be 5% for 2007 (see Ofcom Plans New Public Service Channel To Rival BBC), whilst ZenithOptimedia predict that the global ad market will grow 5.4% in 2007 (see Global Adspend Growth Fuelled By Online)
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