Magna releases upgraded UK adspend forecast
Magna has upgraded its 2010 growth forecast for UK media supplier ad revenues to 3%, up from its previous forecast of 1%.
It now estimates that the media economy will reach £11.3 billion in 2010 – roughly 2004 levels.
However, it added that doubts over the sustainability of the recovery and persistently high unemployment have led it to reduce market growth estimates for 2011-2015.
In total, Magna expects media supplier revenues to grow at a 2.5% average rate to £12.8 billion in 2015. 2010 is likely to be one of the best years of growth out of the next five, it added.
In particular, the latest forecast represents a stronger than previously expected market for television and radio advertising.
Major broadcasters’ advertising revenues have significantly outperformed market expectations, leading Magna to forecast 3.5% TV advertising growth in 2010, despite “concerns that the Contract Rights Renewal burden would depress pricing at leading broadcaster ITV and in turn set a benchmark for market pricing”.
Online has become the UK’s dominant advertising medium and Magna estimates it will continue to grow above market rates in 2010. Search and display are forecast to grow 12% and 5.7% each during 2010.
ZenithOptimedia upgraded its UK and global adspend growth forecasts last week, predicting UK growth of 1.3% this year and global growth of 2.2%.
This followed the release of Carat’s upgraded UK and global adspend forecasts at the end of March, predicting 2.9% growth in the UK this year, with growth of 4.2% expected in 2011.