GroupM predicts TV and press ad revenue drop of £350m this year

A study released by GroupM this morning has estimated that despite an overall rise in advertising spend in the UK, television and radio ad revenue is set to fall by around £350 million this year.

Benefits from the London 2012 Olympics and Euro 2012 are set to have little effect on the fortunes of media advertising, according to GroupM futures director Adam Smith.

“The Olympics effect cannot be quantified but is small in media. It has mattered more to sponsorship and public relations.”

GroupM’s report, “This Year, Next Year: UK Media and Marketing Forecasts” expects ad spending to rise by 3.4% this year (from £12.7 billion to £13.2 billion), and a further 3.2% in 2013.

For press ads, however, it is a different story. Expenditure on national newspapers is expected to drop from £1.2 billion in 2012 to £1.1 billion by 2013; meanwhile regional newspaper spend looks set to fall to £971 million from £1 billion currently.

These figures represent respective declines of 5% and 11%, and it is a similar story for TV advertising.

Predicted growth rates of 3% have been reduced to just 0.1%, with a total of £3.56 billion anticipated back in December now thought to be more than £70 million below this figure.

There is some good news for radio: the growth forecast of 4.7% in December has been upped to 5%, while internet spending is predicted to total £5.35 billion: a rise of 14.2%.

Commenting on the positive news for digital ad expenditure, Smith added: “Digital spending growth already represents a quarter of the entire UK marketing economy, and it continues to grow.

“Smartphone proliferation has suddenly made mobile search an urgent priority, while bestowing long-awaited targeting intelligence at scale.

“Mobile devices are also fuelling second-screen usage, which is another digital revolution in the making: versatile, universal and ergonomic.”