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Advertising Association Long Term Forecast

Advertising Association Long Term Forecast

The long-term forecast to 2012 draws on analyses of past cycles in the economy to predict broader trends in the ad industry. Its stated objective is “to meet the need for long-term strategic planning as opposed to short-term tactical planning”.

The forecasts plan for two eventualities with a high and low set of forecasts. In the lower set of forecasts, downturns are expected to be more severe, and booms smaller or of shorter duration. Latest figures forecast Commercial Radio growth exceeding that of total advertising throughout the next decade, in both the High and Low options. The high forecast foresees decade growth of 117% for Commercial Radio against 76% for all advertising, enabling Commercial Radio’s share of total adspend to climb from 4.3% in 2000 to 5.3% in 2010.

Commercial Radio revenue is still expected to double across the decade under the Low option forecasts – growth here is predicted at 104%, compared to 46% across the market as a whole. Hence Commercial Radio’s share would be set to increase from 4.3% in 2000 to 6.0% in 2010. Given that Commercial Radio suffered to a greater extent than other media from the recession of 1991-92, this Low option of the forecast shows considerable faith in Commercial Radio’s ability to benefit from a period where overall advertising budgets are restricted.

Growth in total ad revenue is expected to drop below 0% in 2004 in the High option forecasts, and to drop below 0% in both 2004 and 2005 in the Low option. The corresponding growth in Commercial Radio revenue also takes a downturn but remains positive throughout. In both High and Low options, Commercial Radio’s peaks are greater in periods of boom, and the troughs are less marked than for advertising as a whole. This implies continued underlying growth of the medium throughout the next decade, although not at the rates enjoyed over the last 10 years.

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