07 Jun 1991 |

Carat’s Media Forecast

Display advertising in Western Europe has increased at a rate of 11.4% between 1980 and 1990, but Carat International forecasts that this rate of increase will decline to 7.5% this year and 9.5% next year (2.7% and 5.4% respectively in real terms).

The predictions come in Carat’s new Media Forecast, covering Western Europe, which will be updated every six months. The report cites the growth in tele- vision as the key trend in the market since 1980. From 17.5% of display advertising in 1980, its share rose to 28.8% last year. Carat forecasts a further increase to 32% in 1992.

Television expenditure grew by an annual rate of 17% between 1980 and 1990 and is now expected to grow by a further 13% and 14.5% (7.6% and 9.9% in real terms) in 1991 and 1992.

Press has seen its share of ad revenue drop from 70% in 1980 to less than 60%. Total revenues, however, increased substantially over this period, by around 158%.

DISPLY AD EXPENDITURE-CURRENT PRICES $m

	TV	Press	Radio	Cinma	Outdr	Total
Year
80	3258	12987	877	210	1242	18574
82	4471	15127	1141	244	1512	22495
84	6223	17994	1419	274	1886	27796
86	8636	21778	1799	310	2377	34900
88	12039	27007	2437	364	3006	44853

90	15737	31863	2937	441	3668	54646
91	17785	33466	3057	472	3888	58668
92	20363	35870	3273	512	4248	64266

Amongst the individual countries, one key change that it forecast is that Spain will overtake both the UK and France as the second largest market after Germany. In France economic growth has slowed down of late, although no recession is forecast and activity is expected to accelerate by the end of the year. The advertising market is forecast to grow by 3% in real terms this year, and by a further 5% in 1992.

TV deregulation has now taken effect but there is a continued ban on retail advertisers using TV.

	TV	Press	Radio	Cinma	Outdr	Total
Year
90	2314	4077	614	75	1087	8167
91	2492	4318	648	75	1147	8680
92	2703	4642	700	81	1250	9376

In Germany, television enjoyed a market share of only 13% when private TV first emerged in 1985; its share now exceeds 18% of the market. By 1992, Carat expects this to have risen to a 27% share.

Ad expenditure in the west of Germany is slightly down on 1990 so far this year, because some money is being transferred to eastern Germany.

	TV	Press	Radio	Cinma	Outdr	Total
Year
90	1976	7684	592	149	449	10850
91	2559	7784	596	158	476	11573
92	3198	7700	566	167	505	12136

In the Netherlands, the deregulation of TV has been the key feature of the media market over the past two years.

The launch of RTL-4 at the end of 1989 had an immediate effect on the market, and after fifteen months it enjoyed a revenue share of almost 50% against the three state channels.

The press is likely to come under increasing attack from the audio-visual sector by the end of 1991.

	TV	Press	Radio	Cinma	Outdr	Total
Year
90	343	1552	60	7	139	2101
91	446	1630	69	7	144	2296
92	535	1695	86	7	158	2481

Spain remains one of Europe’s fastest growing economies, and one of its fastest developing consumer markets.

The state TV monopoly was broken in 1990 by the launch of three private channels, and 1991 has seen the launch of Spain’s first popular daily news- paper.

During the first quarter of 1991, media revenues grew by 11.8% compared with last year.

	TV	Press	Radio	Cinma	Outdr	Total
Year
90	2403	4071	775	59	392	7700
91	3004	4967	814	71	431	9287
92	3605	5861	895	82	483	10926

In the UK in the past year all the economic variables relevant to advert- ising – consumers’ expenditure, retail sales, profits and job vacancies – have been on the decline.

The majority of economic forecasts now suggest that there will be a recovery by the end of this year, with an implicit resumption in advertising growth for 1992.