UK adspend forecast to return to growth in Q3 2010

The report shows that total UK adspend for full year 2009 is now expected to be down 12.7% year on year at current prices, or down 14.6% at constant prices, representing the worst recession for the advertising industry since the AA/Warc quarterly survey began in 1982.

The AA and Warc forecast that advertising spend in Q3 2010 will rise by a modest 2.8% – the first increase since Q1 2008.

Tim Lefroy, chief executive of the Advertising Association, said: “The underlying data shows not just the painful recession effect overall but the dynamic reshaping of the UK advertising landscape. For some it’s the perfect storm, for others the perfect opportunity.”

Rufus Olins, chief executive of Warc, said: “There is clear evidence that the UK’s worst media recession in three decades was bottoming out by autumn 2009, and prospects for a return to growth in adspend later this year are now good. However, as recent UK economic data has shown, the recovery is still fragile.”

Only two media sectors recorded actual adspend increases in Q3 2009: internet (4.2%) and cinema (10.2%).

The internet, including search, now accounts for almost two thirds of all classified advertising according to AA/Warc Q3 2009 data. Across all areas of advertising, the internet’s share gain of 4.2 percentage points is mainly at the expense of press – which fell by the same amount.

At the start of the year, Enders Analysis forecast a 6.9% increase for internet advertising in 2010, adding that newspapers, magazines and television would experience downturns.

Enders forecast a 4% fall in ad revenues for national newspapers, with local and regional newspapers predicted to be down 7.9%.