Several forecasts have been made estimating the extent of growth in the UK advertising market in 2007, with online predicted to be the area seeing the greatest increases.
According to a report from ZenithOptimedia, UK advertising growth is expected to rise 3.1% in 2007, a downgrade from its original expectation of 4.2%.
ZenithOptimedia says that online’s share of total UK adspend is expected to grow to 17.2% by 2008, up from 12.95 in 2006 (see ZenithOptimedia Downgrades UK Ad Growth Forecast).
In a separate report, ZenithOptimedia said that the global ad market will grow 5.4% in 2007, staying ahead of the 5.1% growth rate it has shown for the past ten years (see Global Adspend Growth Fuelled By Online).
Meanwhile, strong UK company profitability will act as the biggest boom to advertising spend in the UK in 2007 according to OPera Media.
OPera says that strong increases in the online search and classified sectors will see total advertising spend increase by 3.0% for the year ahead.
Television, press, and radio markets are forecast to lose share of advertising spend in 2007, whilst growth in display revenues will come from cinema and out-of-home. However, the majority of next year’s expenditure increase is predicted to come from online, as it did in 2006 (see 2007 UK Advertising Spend Boosted By Online).
OPera forecasts that online advertising expenditure will increase by 27% this year, from an estimated 45% increase in 2006.
In line with this, the latest Chartered Institute of Marketing’s (CIM) Marketing Trends Survey revealed that marketers in the UK expect online and digital marketing to be the area in which marketing spend will increase the fastest (see UK Marketing Spend To Increase Fastest In Online And Digital).
The survey shows that marketers are preparing to up their budgets in this area by 2.7%, with it being smaller companies who are embracing this activity most readily, and in this sector an increase of 3.2% is expected.
In November, GroupM revealed that the UK would be Europe’s slowest growing major ad market in 2007, were it not for the internet (see Ofcom Plans New Public Service Channel To Rival BBC).
Carat expects the UK to show advertising expenditure growth of 4.2% this year, down from its previous forecast of 4.6% for 2007, with European growth expected to be 4.1% in 2007.
With regards to the UK economy as a whole, a forecast from the National Institute of Economic and Social Research said that the UK economy is set to grow at or just above 2.5% per annum this year, with inflation expected to rise only slightly before falling back to the target of 2% per annum by the end of 2007 (see UK Economy Set To Grow At 2.5%).
In contrast, OPera Media released a report which quoted a consensus estimate from the HM Treasury Forecast of the UK Economy showing a slight moderation in expansion for 2007 at 2.3% (see Global Economic Growth To Remain Robust In 2007).
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