Advanced Television

Zenith halves TV ad forcast

June 19, 2012

Advertising buying network ZenithOptimedia has halved its TV ad revenue growth forecast for the UK in 2012, while predicting digital spend will rise by £200 million (€249 million). ZenithOptimedia is forecasting year-on-year growth of just 0.5 per cent in the UK television advertising market this year to £3.3 billion.

The revised forecast follows widespread concern that advertiser sentiment has failed to follow predictions of a “summer of love” for commercial broadcasters and other media owners from events such as the London Olympics.

Earlier this month ITV saw its share price fall by more than 12 per cent after it emerged that July TV ad revenue could be down by double digits in July and as much as 5 per cent in August compared with the same period last year.

In March, ZenithOptimedia said it expected UK TV ad revenue to grow by 1 per cent. Steve King, the ZenithOptimedia worldwide chief executive, said that the downgrade to TV ad forecasts was because of a decline in spending from retailers and fast-moving consumer goods companies.

ZenithOptimedia’s latest forecast, which is due to be unveiled at the Cannes International Festival of Creativity on Tuesday morning , will see an upgrade to the total UK ad market to 3.5 per cent year-on-year growth for 2012. This is a boost over about £150 million over the March prediction of growth of 3.2 per cent.

The big winner is Internet advertising, with ZenithOptimedia has raised its forecast to double-digit year-on-year growth, 10.3 per cent, from its March forecast of 9.3 per cent. This equates to a £200 million upgrade in the amount of ad spend expected to flow into digital media in the UK.

“Internet advertising continues to drive most of the growth in the UK ad market, and we expect it to attract 35 per cent of expenditure this year, more than anywhere else in the world,” said King.

UK internet advertising spendhit £4.78 billion in 2011 to account for 28 per cent of total advertising spend in the UK, according to figures compiled by the Internet Advertising Bureau.

ZenithOptimedia maintained its outlook for the UK newspaper industry of an overall 1.7 per cent year-on-year fall in ad spend this year, while radio advertising is predicted to grow by 2.4 per cent.

Outdoor advertising, expected to be a major beneficiary of spending around the London Olympics, is forecast to receive a 4.9 per cent year-on-year boost – the most of any medium except the internet.

ZenithOptimedia also released a revised forecast for growth in global advertising spend of 4.8 per cent, to $489 billion.

“This upgrade is a result of two factors: signs that large companies are investing more in marketing to drive growth, and a reduced risk of disastrous collapse in the eurozone, even though its short-term economic performance has deteriorated,” the media buying


Categories: Ads, Advertising, Articles, Markets, Research