UK advertising expenditure is forecast to rise by 3.7% in 2006, with new forecasts from Initiative Media predicting online to be the fastest growing medium fuelled by the increasing uptake of broadband.
Initiative expect 2006 to be another slow year for the UK media market, albeit a better one than 2005, with the projected 3.7% growth, improving on 2005’s 2.8% growth rate.
Looking at the different media, TV advertising revenue is forecast to rise by 3% year on year, resulting from increased adspend due to the World Cup in June and July. The media company claim that motor advertisers will spend more during the World Cup year, while telecoms spend is likely to be under pressure.
The press market as a whole is expected to remain static in 2006, with a downward trend in sales of national newspapers resulting in advertisers cutting adspend by 1.2%. Magazines are fairing better, with 2% growth forecast.
Turning to radio, Initiative claims that recent mergers in the commercial radio sector have resulted in lost revenue, with the increasing fragmentation in the market damaging adspend projections. However, as these factors settle in 2006, commercial radio is expected to continue its long-term ascent in the ad revenue table.
Collaboration between the major sales groups is creating new national syndicated programming and advertising revenues, leading Initiative to forecast a 1% rise in radio adspend for 2006.
Outdoor looks set to enjoy a healthy performance in 2006, with growth of 6.3% reflecting its ability to reach a national audience and incorporate new digital technology, the industry’s key selling point.
Despite a poor 2005 for cinema adspend, Initiative forecasts the media to enjoy a period of recovery in 2006, with advertising expenditure for the year up by 5%, boosted by a series of high profile films, including the latest James Bond film, Casino Royale, Superman Returns and Pirates of the Caribbean 2.
Yet again, online advertising spend, is expected to see the fastest adspend growth up by 26.3% year on year in 2006. Initiative attributes the strong performance to the increasing take-up of broadband, with nearly 10 million UK households now having high-speed connections.
Initiative’s projections are less optimistic than those of OPera Media, expecting UK adspend to rise by 4.5% in 2006, reaching £13.2 billion (see UK Adspend To Hit £15 Billion By 2010).
The upturn in the UK advertising market is also reflected in the latest Bellwether Report from the IPA, predicting marketing budgets in the UK to rise in 2006, with new media activities projected to enjoy strong growth (see Q4 2005 Bellwether: Marketing Budgets Forecast To Rise In 2006).
| |
| Year on Year Growth (%) |
| Medium |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
| All Media |
-6.1 |
1.1 |
3.1 |
6.7 |
2.8 |
3.7 |
| TV |
-9 |
4.5 |
1.1 |
6 |
2.6 |
3 |
| Press |
-5.4 |
-4.4 |
-1.1 |
3.9 |
0 |
-0.3 |
| Newspapers |
-8.4 |
-6.4 |
-1.5 |
3.7 |
-0.9 |
-1.2 |
| Magazines |
3.9 |
0.8 |
-0.1 |
4.5 |
2 |
2 |
| Radio |
-7.7 |
2.5 |
7.3 |
6.1 |
-0.3 |
1.5 |
| Outdoor |
-2.7 |
3.6 |
12.1 |
7.8 |
7 |
6.3 |
| Cinema |
50.5 |
10 |
-3.2 |
6.8 |
-4.5 |
5 |
| Internet |
7.1 |
18.7 |
68 |
38.7 |
25.3 |
26.3 |
| Source: Initiative channel experts |
Related Links
