GCap Media today warned that the outlook for the radio advertising market remained weak, after advertising revenues fell dramatically during May.
The company revealed that total group revenues dropped by 14% in May, on the back of “weak” consumer confidence and a decline in marketing spending from a number of key advertisers.
GCap said that the weak trends endured in May looked set to continue throughout June and July, leader to greater difficulty in predicting market when the market is likely to improve.
Commenting in a statement to the city, GCap said: “Visibility remains limited and GCap Media continues to take a cautious view on market conditions for the foreseeable future.”
Underlying results for GCap showed revenues of £245 million, operating profit of £42.7 million and underlying profit before tax of £39 million.
GCap is not alone in experiencing a decline in advertising revenue, with radio group, Chrysalis, reporting a drop of 14.5% in radio revenues for the three months ended 31 May 2005, and predicting the outturn for June to be similar.
Like GCap, Chrysalis also feels that the outlook for the advertising market remains “short term”, with little visibility into July and August.
Both Chrysalis and GCap’s results and predictions for the radio advertising market echo the latest figures from the Advertising Association, which showed radio adspend for the first quarter of 2005 to be down by 0.2% year on year (see UK Adspend Up 5.3% In Q1 2005).
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