Zenith Media has published its six-month UK Television Forecasts to 2003 covering advertising, viewing, satellite, cable and audience costs-per-thousands.
According to the report, total UK advertising expenditure grew by 7% in 1996, 4.5% in real terms after accounting for RPI, and is forecast to rise by a further 6.9% this year, or 3.8% in real terms, on the back of the continuing economic recovery. Television’s share of advertising budgets remained static last year, with advertising expenditure in the medium rising by 6.9%. Zenith expects TV revenues to increase by 5.8% this year.
For the fourth year running, the fastest growing medium in 1996 was radio, with a revenue rise of 14%. Zenith expects another strong year in 1997, with radio forecast at a further 12%. Satellite continues to grow steadily, currently attracting viewers in just over 25% of all homes.
Advertising accounted for £10.5 billion, or 1.4% of the UK’s gross domestic product last year. Zenith expects advertising to amount to £15.1 billion, or 1.5% of GDP by 2003.
The company has scaled down its audience share and revenue predictions for Channel 5 this year. Zenith now expects 5 to attract £80 million in advertising revenue and 5% share of the commercial TV audience in 1997. The company has also scaled back its predictions for satellite TV penetration due to the sluggish rate at which homes passed by cable are converted to connections. For the past 5 years an almost static conversion rate of 22% has not been improved upon. Zenith expect32% of homes to be connected to cable and 37% to be connected to satellite by 2003. Satellite advertising revenues are expected to rise by 25% to £213 million in 1997.
For ITV, Zenith forecasts a 1% increase in ad revenue this year to £1,675 million. Over the next seven years, with a competitive Channel 4 and growing competition from satellite and Channel 5, ITV revenues are expected to decline in real terms every year. The forecast for 2003 is £1,465 million, as opposed to £1,659 in 1996.
Channel 4’s strong performance over the last 3 years has now flattened out. The channel’s ad revenue is predicted to rise by 1.2% to £495 million this year. Having reached a more stable position, the report predicts the fortunes of the channel will mirror those of ITV over the coming years as competition from satellite and Channel 5 increases. It is believed that Channel 4’s revenue will remain around a fifth of terrestrial revenue throughout the forecast.
GMTV is expected to see ad revenue decline by 6.4% in 1997, to £73 million and by a further 5.5% in 1998, to £69 million.
Advertising cost, as measured by the cost of achieving a thousand adult advertising exposures, is expected to inflate by 4.2% this year, and in real terms, to rise by 7% by 2003.
Zenith Media: 0171 255 1221
