TV advertising revenue is growing at the fastest rate since 2000, enjoying a 14.5% increase compared to the same period in 2004, according to data released by media agency Starcom.
The UK branch of the media services agency predicts healthy growth for Q1 of 2005, citing a 14% increase year on year, despite poor economic conditions and a weak last quarter of 2004. The grocery sector, comprising food and household stores is forecast to lead the surge in television ad revenue, coupled with retailers desperately trying to spend their way out of the Christmas decline.
Commercial audiences are still growing largely as a result of Channel 4’s ‘Celebrity Big Brother’, which boosted the main channel, as well as sister channel E4. However, Channel 4’s success has been to the detriment of ITV. Multi channel audiences are earmarked by Starcom as performing well, confirming a recent report from PricewaterhouseCoopers, commissioned by Ofcom, predicting that UK TV advertising revenue will be increasingly fuelled by multi-channel broadcasters (see Multi-Channel TV Predicted To Lead Adspend).
The increasing penetration of Freeview, which now reaches 5 million UK homes, sees ITV2 overtaking Sky One to become the biggest non-terrestrial channel.
TV inflation has returned to levels not seen since the 1990s with revenue growth outstripping the rise in audiences, resulting in an increase of 10%. Starcom predicts this trend will continue until March, estimating ITV inflation for January to be alarmingly high, hitting 25% for many audiences, as a result of programme changes. However, the agency forecasts inflation to settle close to the market norm of 5% for total TV and 8% for ITV in February and March.
Starcom’s predictions mirror those of fellow media agencies, MediaCom, Mediaedge:cia and OPera Media, all forecasting January and February TV revenues to be much higher than expected (see TV Adspend Predicted To Rocket In Q1 2005).
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