AA upgrades UK adspend forecast for 2010

Advertising expenditure is expected to increase by 5.3% this year and by 2% in 2011, according to new figures from the Advertising Association, which have been researched and compiled by Warc.

The Advertising Association has upgraded its forecast for 2010 (from 3.3%) and downgraded expectations for 2011 (from 2.4%).

In Q2 2010, adspend rose by 10.1%. The report attributes the strong growth to the World Cup in June, as well as a weak comparable result for Q2 2009. The poor weather in the first three months of the year may have also delayed some ad campaigns until the summer, the report said.

All media, with the exception of direct mail, recorded growth in the second quarter. TV and cinema, up 24% and 25% respectively, saw the biggest increases, although out of home and the internet also performed well.

The research shows that TV, internet, cinema, outdoor and national newspapers all saw their shares of display advertising spend grow year on year in Q2.

Online (including search) continues to gain share of classified (reaching 67.3% in Q2) at the expense of newspapers and business magazines, the report said.

The internet’s share of total advertising spend increased 2.3% in the year to June 2010, while TV gained 1.7%. However, this came at the expense of press and direct mail.

Overall, radio had a particularly disappointing quarter, managing just 0.6% growth.

Looking ahead, the rest of the year is expected to see moderate adspend growth – up between 3% and 5%. Later months will benefit from spending in advance of the VAT increase in January 2001, according to the Advertising Association.

However, the impact of the coalition government cuts and low consumer confidence are likely to restrain growth next year.

Television, online and outdoor are all expected to put in a strong performance in 2010, though television will be the fastest growing medium this year.