UK Media Outlook From Merrill Lynch
Advertising conditions in the UK are beginning to improve, with ITV’s revenues showing some stable growth for the first time in many months (see Outlook Improves For ITV Advertising) and the year now predicted by the Advertising Association (AA) to show positive overall growth.
| UK Advertising Growth Forecasts Comparisons | |||||
| 2000 | 2001 | 2002F | 2003F | 2004F | |
| Zenith | 8.8 | -4.4 | -1.3 | 2.6 | 3.8 |
| Advertising Association | 9.8 | -5.2 | 0.1 | 5.7 | |
| Average | 9.3 | -4.8 | -0.6 | 4.15 | 3.8 |
| Source: Merrill Lynch, July 2002 | |||||
Television Merrill Lynch analysts say that ITV advertising now looks as though it is improving by the minute, with August and September possibly up as much as 5%, according to anecdotal evidence. This would be the fifth consecutive month of a year on year rise in revenue; no further declines are expected on a month by month basis this year.
Zenith is forecasting a 1.3% decline in 2002, followed by a 2.5% growth in 2003.
| ITV Advertising Estimates | |||
| 2001 | 2002 | 2003 | |
| Jan | -9.5 | -16.0 | – |
| Feb | -5.8 | -16.8 | – |
| Mar | -8.3 | -7.3 | – |
| Apr | -18.8 | -11.6 | – |
| May | -20.2 | 9.3 | – |
| Jun | -24.1 | 8.5 | – |
| Jul | -14.7 | 5.0 | – |
| Aug | -7.1 | 3.0 | – |
| Sep | -18.0 | 0.5 | – |
| Oct | -12.1 | 4.8 | – |
| Nov | -12.9 | 3.0 | – |
| Dec | -3.1 | 1.5 | – |
| TOTAL | -13.3 | -1.6 | 4.0 |
| Source: Merrill Lynch, July 2002 | |||
Radio Analysts say that UK radio trading is currently erratic. March was strong, whilst April dipped back down, possibly as the inverse of an early Easter spend in March. May and June are looking better, although visibility remains poor.
However, recent results from Capital (see Capital Radio Profits Hit By Ad Decline), GWR (see GWR To Focus On UK Market As Group Profits Fall) and EMAP (see EMAP ‘Cautiously Optimistic’ On Future Trading) have all pointed toward a slowing in momentum of the decline, although the World Cup disrupts underlying trends, the broker notes.
A second half decline is likely to be driven more by easier comparables than by a substantial underlying growth; Merrill Lynch forecasts 2002 to be flat, with 5% to 7% growth in 2003. Zenith predicts a 1.2% growth this year followed by 4.5% next year.
Other media Zenith advertising forecasts for all media for 2002 and 2003 are shown here:
| UK Advertising Growth Forecasts | ||
| 2002 | 2003 | |
| Television | 2.5 | 4.4 |
| Radio | 1.2 | 4.5 |
| Newspapers | -3.8 | 0.8 |
| Magazines | 1.4 | 2.5 |
| Total | -1.3 | 2.6 |
| Source: Zenith quoted by Merrill Lynch, July 2002 | ||