GroupM: UK Ad Forecast Raised Sharply

By Mark Sweney: Sir Martin Sorrell’s Group M has dramatically raised its forecast for the UK advertising market in 2010, from flat to 4.2% year-on-year growth.

Group M, WPP’s combined media buying operation, expects a particular surge in TV advertising, revising its forecast from an overall decline for 2010 to a year-on-year increase of almost 12%.

But TV’s gain has not been to the detriment of other media, it says, with national newspaper and radio advertising also in line for significant boosts.

In December Group M forecast that the UK would see total ad spend remain flat this year. Within this TV advertising was predicted to be down 0.2% year-on-year, national newspaper advertising down 6.6%, radio down 9% and regional newspaper advertising down 3.8%.

However, this forecast has been turned on its head, largely due to a massive increase in advertisers ploughing money back into TV as prices dropped to almost record low levels.

Group M is now forecasting that TV advertising will be up 11.6% this year and a further 3% next year. Cheap TV prices have meant the return of “dormant” advertisers, the release of budgets held back during the downturn last year, and test or regional activity stepping up into national campaigns.

The media buyer expects the double-digit revenue growth seen in most months this year, thanks to year-on-year comparatives “softer than marshmallow”, to continue through to August. After that growth is likely to be a more modest 3% year-on-year growth each month for the rest of 2010.

National newspaper advertising, which had been predicted in December to be down 6.6% this year, is now expected to be down just 2% this year and to show growth of 2% in 2011.

Radio advertising, which had been forecast in December to be down 9%, is now expected to be up 6% this year and 4% next year.

However, there is continuing bad news for regional newspaper advertising, which had been predicted to be down 3.8% this year, with Group M forecasting an ad revenue fall of 7% in 2010. The forecast is for a further 4% fall in 2011.

Outdoor advertising, predicted to be up 2.2%, has been raised to 7% in 2010 and 6% in 2011.

Overall Group M forecasts that the total UK ad market will see 3.3% year-on-year growth next year.

This article originally appeared in © Guardian News & Media Ltd..