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UK Advertising To Outpace Economy In 2004, Says Initiative

UK Advertising To Outpace Economy In 2004, Says Initiative

UK advertising growth is set to outpace economic growth this year, after underperforming in 2003, according to the Spheres Of Influence report from Initiative Media.

Advertising expenditure is forecast to grow by 4.2% this year, after an expected 2.2% rise in 2003. Annual economic inflation, is predicted to close at 2.8% in 2003 – stronger than advertising. In 2004, economic growth is forecast to be just 2.5%, below advertising’s 4.2%, according to Initiative.

The internet will be resurgent this year, with expenditure expected to jump by 46.2% in the UK, after a predicted 25.4% growth in 2003. Even this figure is erring slightly on the side of caution, according to the report’s author Tonia Perretta. Digital marketing agency i-level, for example, is forecasting that online spend will close 2003 at 65% higher than in 2002 (see INSIGHTanalysis: Search Targeted Marketing Success Story Continues).

Between 2000 and 2004, the internet’s share of the UK advertising market will have grown from 1.8% to 4.1%, if Initiative’s forecasts unfold. Over the same period, television’s share will fall from 45.6% to 43.7%, as shown.

UK Advertising Share By Medium 
           
  2000  2001  2002  2003F  2004F 
TV 45.6 44.3 45.0 44.3 43.7
Radio 7.0 6.1 5.9 6.0 6.2
Press 36.3 37.4 36.5 36.2 35.4
Outdoor 8.2 8.5 8.3 8.8 8.8
Cinema 1.1 1.8 1.9 1.7 1.8
Internet 1.8 2.1 2.4 2.9 4.1
Source: Initiative Media, February 2004 

All the other media categories will also show positive growth in 2004, although the largest sector, television, will not be particularly strong at a rise of just 2.9%. This is an improvement on 2003’s practically flat TV market, which will finish up by just 0.6%, according to the report.

UK Advertising Trends By Medium 
             
  2002  2003  2004 
  Spend (£000)  Growth (%)  Spend (£000)  Growth (%)  Spend (£000)  Growth (%) 
TV 3,722,444 4.9 3,744,883 0.6 3,851,904 2.9
Terrestrial  3,087,620  2.2  3,018,648  -2.2  3,055,991  1.2 
Satellite/cable  634,824  19.9  726,235  14.4  795,913  9.6 
Radio 491,000 1.0 510,000 3.9 543,000 6.5
Press 3,024,000 1.0 3,064,000 1.3 3,122,000 1.9
Newspapers  2,239,000  1.1  2,263,000  1.1  2,297,000  1.5 
Magazines  785,000  0.8  801,000  2.0  825,000  3.0 
Outdoor 690,100 1.9 745,900 8.1 779,500 4.5
Cinema 153,800 9.6 147,000 -4.4 160,000 8.8
Internet 197,000 18.7 247,000 25.4 361,000 46.2
Total  8,278,344  3.3  8,458,783  2.2  8,817,404  4.2 
Source: Initiative Media, February 2004 

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