‘Short-term thinking slowing ad market’

Advertising spend crept up by 1.1% in the first quarter of 2012 as cautious brands kept a tight reign on marketing budgets, according to the latest data from the Advertising Association and Warc.

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Marketers are adopting a short-term approach because of uncertainty over prospects for the UK economy in the second-half of the year, the report’s authors say. As a result, forecasted ad spend growth for 2012 has been revised down to 2.5%, from the 3.8% increase predicted in April.

The AA/Warc forecast is below that of ad agency network GroupM, which forecast a 3.4% rise in ad spend this year.

Internet spend, unsurprisingly, saw the strongest growth in the first quarter of the year, up 11.1% on the same period last year and is expected to reach a value of £5.3bn by the end of the year.

Radio ad spend was 6.9% up year-on-year and is expected to increase 3.8% for the year overall.

Ad spend on cinema increased 9.5% in the first three months of the year and is expected to be see a 3.1% rise over the course of the year to reach a value of £0.2bn.

TV and press both saw declines in ad spend in the first quarter. Spend on TV advertising fell 0.7% but is expected to regain some ground across the year, with 0.3% growth forecast.

Press advertising was the weakest media channel reporting a 10% decline in the first quarter although this too is expected to improve. AA/Warc forecasts a 5.1% overall decline in press advertising spend for 2012.

Suzy Young, data editor at Warc, says: “It [advertising] remains a very short term market. There is some evidence that TV advertisers, for example, have brought budgets forward to Q2 from Q3 to get the benefit of marketing spend now as prospects for the rest of the year remain unclear.”

The AA/Warc report provides an overview of ad spend on individual media and includes figures from national newspaper publishers, Ofcom, the Radio Advertising Bureau, the Outdoor Media Centre and Nielsen as well as Royal mail and the Internet Advertising Bureau.

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