Agencies are worried that a dip in media spend by clients in the fourth quarter of this year may be the first indication of a new economic slowdown.
ITV’s revenue growth slowed during October to four per cent year on year (MW October 6), compared with nearer nine per cent in the summer. November’s revenues are expected to fall by 5.5 per cent while December is expected to be down five per cent.
The decline has spread to outdoor, where one national contractor is estimating that revenues will fall by as much as ten per cent year on year in November and December.
“Broadly, as a sector, media has slowed down,” says Christine Walker, chief executive of Zenith Media, the UK’s largest media buying agency. “It is not simply a reaction to media inflation earlier in the year, it is more sinister. Things are slowing down more than is being owned up to.”
Many top ten agencies agree, and cite clients who are cutting budgets in order to support profits weakened by a lack of consumer demand. Retail sales for the third quarter of 1995 increased by only 0.3 per cent by volume – an increase mainly accounted for by high street discounting.
Media owners in radio and cinema, where it is harder for agencies to estimate demand, claim to be unaffected.
Colour advertising in the national press has remained buoyant, but growth in the medium as a whole for the fourth quarter is slower than earlier in the year because of a lack of tactical mono advertising.