Screen Digest is forecasting UK advertising revenue to drop by 8.4% in 2009 as marketer’s confidence falls to its lowest point and several major client industries such as finance, retail and automotive retract budgets.
As prices have hit an all-time low, TV advertising is set to decline by 7.7% in 2009, predicts Screen Digest. Amplified by audience fragmentation, analogue terrestrial TV will be hit hardest and both ITV1 and Channel 4 are forecast to be down 10% in 2009.
Q2 will be the lowest point, the research firm said, with prices hitting a 20 year low. However, there will be stabilisation for the second half of the year, as some advertisers and agencies take advantage low prices to increase their share of voice over competitors.
In the long-term, for 2010 and beyond, a number of small factors such as the relaxation of the Contract Rights Renewal rules on ITV1 and more liberal EU regulation on product placement and ad-insertion rules should help TV to a modest recovery.
Major sporting events like the Football World Championship in 2010 and the London Olympics will also help restore the fortunes of TV advertising, said Screen Digest.
Vincent Létang, Screen Digest head of advertising and author of the report, said: “The UK TV advertising market is going to remain sluggish for a number of years and it will take the 2012 London Olympics to provide a strong boost and only then will we see the growth rates we experienced at the beginning of this decade (+6 per cent in 2012).
“Even by the end of 2012, the market will merely be back to its 2003 size (£3.2 billion)”.
Adspend levels in the UK will fall by 4.3% in 2009 at current prices, with the first upturn, a modest 0.3% rise year-on-year, set for Q2 2010, according to the recently released Advertising Forecast, produced by WARC for the Advertising Association.
The report found that online is the only medium likely to grow throughout this period, at an average of 9% per quarter, while outdoor and transport will be the first form of traditional media to recover, with growth of 4.3% in Q1 2010 (see UK adspend levels to fall 4.3% in 2009).
GroupM, meanwhile, has forecast that total UK advertising spend will fall by nearly 6% year on year in 2009, the worst of any developed country (see UK ad spend to fall nearly 6% in 2009).
