AA slashes UK adspend growth estimates

UK advertising expenditure is expected to increase by just 2.3 per cent this year. This is below the 3.7 per cent predicted by the Advertising Association earlier in the year and less than half the 4.4 per cent increase the organisation expected to see 12 months ago.

The figures, published this week in the AA's Advertising Forecast publication, were researched and compiled by the World Advertising Research Center in a report that covered above- and below-the-line media.

The findings blamed disappointing growth of the UK economy and a decrease in consumer spending for the downward revision of adspend growth estimates.

Nevertheless, the AA report underlines digital advertising's role as the driving force for growth in UK adspend, predicting the medium will increase by the greatest margin, with 39.6 per cent growth forecast for 2005.

The figures represent a more conservative valuation of the digital market than last week's report from the Internet Advertising Bureau, which recorded 62.3 per cent growth for the first six months of the year and put the value of the online advertising market at more than £1 billion for the year 2005.

Outdoor and cinema advertising show the biggest gains in traditional media, with growth of 7.4 per cent and 4.9 per cent, respectively.

Declines are expected for business-to-business and professional magazines, radio and direct mail. Above-average growth is predicted for television, at 2.9 per cent, while press will remain stagnant, with growth of just 0.1 per cent.

Growth across all media is expected to accelerate significantly next year, with an increase of 4.4 per cent at current prices forecast.

AD EXPENDITURE Medium 2005 on 2004 % change at current prices National newspapers 0.7 Regional newspapers 0.4 Consumer magazines 1.0 Business magazines -2.5 Total press 0.1 - of which display 0.9 - of which classified -0.8 Television 2.9 Radio -1.5 Outdoor 7.4 Cinema 4.9 Internet 39.6 Direct mail -3.3 Total 2.3 Source: AA's Advertising Forecast.