Carat predicts 12% fall in UK adspend

Carat has forecast a 9.8% fall in global adspend for 2009, with the UK expected to be down almost 12%.

Carat, part of Aegis Group, predicts an 11.7% fall in the UK, revised down from 7.1% in March this year, saying that “hopes of a Q4 market recovery are now unlikely”.

With the exception of internet and cinema, all other media are forecast to suffer a double digit decline year on year. TV (-11.9%), Radio (-12.6%), Outdoor (-12.2%) have all been hit by roughly the same decline, said Carat.

Newspapers and magazines have been hit the hardest, -20.3% and -16.3% respectively, although some of their decline is likely to be structural.

Carat forecasts modest growth for 2010, with the football World Cup expected to benefit the market, however a recovery is not expected to be properly underway until 2011.

In July, ZenithOptimedia forecast a 10.5% fall in Uk adspend this year.

Online advertising remains the only area of the media that will see growth this year, estimated at 1.0% globally. Of the sectors, Television and Cinema continue to hold up best, reflecting the relative popularity of cinema and home entertainment in the downturn.

GroupM recently predicted that internet advertising would account for about 15% ($64.7 billion) of global measured adspend in 2010, up from an expected 13% this year.

Jerry Buhlmann, CEO of Aegis Media, said: “These significant revisions are not unexpected in the context of the recent volatility of the market, and represent a cautious attitude towards adspend this year, most significantly in the US and Europe.

“China remains the most resilient of the major economies, and we have revised our estimate upwards since March to 6.9% for 2009. However, even in China, we have noticed advertisers proceeding cautiously, and adjusting spend on a quarterly basis.

“Despite the reduction to forecasts for 2009, we still believe that 2010 will see growth, albeit very modest. We expect the market to bottom out in North America and Europe, and to improve further in developing markets. Even after that initial recovery, however, the global advertising market will still be below its absolute 2006 level.”

Over the next two years, online is set to meet the 10% of spend level for the first time, with television also predicted to increase its share in 2009 and 2010. Newspapers and magazines are exepcted to lose out while other categories should remain broadly flat, said Carat.