Insight Analysis: US vs UK, Q1 Ad Revenue Growth Comparisons By Media

In the UK, outdoor saw the greatest increase with revenue soaring 19.3% from just under £150m for the Q1 2000 to just under £180m for the Q1 2001. National Newspapers saw the second highest climb, with ad revenue increasing 11% to £631.8m. Growth in radio ad revenue was less significant, rising a modest 1% to £121.3m, while TV was the only sector to see advertising revenue fall, dropping 2.3% to £904.4m. Considering that TV revenue grew by 13%, year on year, in January alone last year this is hardly a surprising fact. It was never expected that TV revenues for Q1 2001 would stand up to the harsh comparables brought about by last year’s boom.

In the US, the picture was significantly worse. All sectors showed a decline in growth for Q1 2001 with radio particularly badly hit, experiencing a drop of 22.5% in combined local and national revenues. Newspapers also showed a considerable decline with total revenues falling from $5641.3 in 2000 to $5045.6 in 2001.

It is unsurprising that first quarter totals for the US are worse than for the UK considering the relative nascence of online in the rest of the world. The worrying factor for UK media must be that if US analysts are not predicting a recovery this year, how long must the UK wait for the upturn? Most UK analysts are predicting a rise in media expenditure for 2001, albeit a small one whereas US analysts are, on average, unable to see an upturn until 2002 at the earliest.

It is likely that the UK will be spared the depth and breadth of the US downturn considering the relative size of the UK economy. In the US too the crisis has extended to the technologies markets and to the economy at large – house building is rumoured to be the next area to slump. In the UK, despite the recent manufacturing recession admission, the situation is not in quite so dire so whilst the Soho sandwich shops may be slightly quieter for a while, there is currently no indication that the economy will achieve the lows witnessed in 1990/91. Seasonal variances may be enough to put the UK media economy back into the black – Q4 should bring substantial enough growth in spending to allow for a market recovery by the end of 2001.