…as advertisers ‘scale down media budgets’

Gloom about the economy is causing media analysts to downgrade their predictions of advertisers’ spend for this year and next.

Spend will slow down next year to a predicted growth rate of 6.9 per cent, according to Carat Research. This compares to the 7.2 per cent growth expected for this year, and last year’s growth of 10.4 per cent. In June, Carat was forecasting media growth of 10.2 per cent in 1995 and eight per cent in 1996.

In cash terms, Carat is predicting a total media spend of 6.23bn in 1995 and 6.66bn in 1996.

Carat’s forecast provides confirmation of reports from agencies that the slowdown in ad spend in the year’s fourth quarter may last into 1996 (MW November 10).

“It is a reflection of the economy, the UK’s growth rate is at its lowest for two years,” says Colin Macleod, a director of Carat Research.

The slowdown in expenditure growth is expected to be worst in the TV market, where the forecast matches the media market as a whole – 7.3 per cent growth this year and 7.1 per cent in 1996.

“TV responds the quickest and other media tend to lag behind as economic indicators,” adds Macleod.

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