UK ad industry shows signs of recovery

The UK advertising industry may come out of recession earlier than other countries and see a better 2009 and 2010 than previously predicted, according to WPP’s media agency network GroupM.

GroupM

The group predicts that the UK could be one of the first countries out of the ad recession, with a 0.1% year-on-year increase in ad spend in 2010, while most other European markets are expected to have single-digit falls, but there will not be ‘substantial growth’ of at least 5% until 2012.

Marketers are expected to maintain ad investment going into 2010 despite uncertain consumer demand and pressure to get more marketing for less money.

Group M futures director, Adam Smith, says: “Our midyear forecast predicted a deeper decline of 14% in 2009 UK ad spending. Both 2009 and 2010 are looking slightly better than we imagined six months ago. Confidence seems to be improving, though based on anecdotes rather than substance. This alone may be enough to revive marketing investment, but it cannot make any easier the fiscal and household consolidation which lies ahead in 2010.”

Spending in the UK will fall 11.6% this year compared with 2008, the report predicts.

However, it warns that improved confidence was based on “anecdotes rather than substance” and the “household consolidation which lies ahead in 2010” could have a negative impact on the UK advertising market next year.

The group forecasts that TV advertising spend will fall 11.6% year on year in 2009 to £2.92bn, but only fall 0.2% next year. Print advertising is forecast to drop 20.4% year on year in 2009 to £3.9bn, and fall 6.2% next year to £3.6bn.

Internet and mobile advertising is set to rise 2.7% year on year for 2009 to £3.4bn and rise again in 1010 by 7.3% to £3.7bn.

Overall UK spend by advertisers next year would be the virtually same as 2009, up just 0.1% year on year. However, there was no real sign of increased spending in struggling sectors such as financial services, automotive and food.

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