The Advertising Association Quarterly Forecast predicts performances by major product sector for the next two years. The product sector groupings used are Retail, Industrial, Financial, Government, Services, Durables and Consumables Retail (including traditional retail, mail order and online retail) continues to benefit from the dot coms; mail order continues to lose ground to e-commerce while advertising for conventional retail operations is slowly increasing. Hence predicted growth in 2000 is strong at 12.5%, but 2001 will see the end of the e-commerce boom with growth falling away to just 2.5%.
Industrial looks set to remain a buoyant sector with growth rates for 2000 and 20001 forecast at 26.4% and 11.1%, respectively. This includes Telecoms and Computers, both key spending products on Commercial Radio, hence contributing to the Industrial sector’s 16% share of total revenue.
Recent growth in the Financial sector is expected to come to an end – revenue for 2000 is predicted to be up 26.2% year-on-year but will then remain static in 2001. This boom may be attributed to competition between established and new institutions with the launch of many financial services on-line. The continued move towards abolition of the “wealth warnings” on radio advertisements could result in increased revenue from financial products for Commercial Radio, as we have already witnessed in the mortgage sector.
Government advertising centres around that from COI Communications and accounts for a small but relatively stable 2% of Commercial Radio revenue. Expenditure in this sector is expected to drop slightly over the next two years, but forecasts are difficult as spend is determined by policy decisions rather than economic conditions.
The Services sector (including Entertainment, Sports, Travel and Business Services) is predicted to maintain relatively stable growth of just over 6% for the next two years. As Travel and Transport lose out to the internet, declines in spend from these advertisers are likely to be offset by increased investment within Entertainment and the Media.
Durables (including Motors, Household and Leisure Equipment) remains a strong sector for Commercial Radio despite zero growth forecast for 2000. In 20001, however, Durables are set to buck the trend and increase activity 4.4%, hence maintaining a 21% share of total revenue.
Consumables (including FMCGs, Clothing, Cosmetics and Toiletries) is Commercial Radio’s highest spending sector, set to take a 24% share of total revenue across the next two years. A 1.5% decline in spend in 2000 will be followed by a recovery to 4.0% growth in 2001.
