Recession may bring end to rising adspend

Analysts fear that a return to recession next year could bring an end to the record UK adspend figures enjoyed in recent years.

Analysts fear that a return to recession next year could bring an

end to the record UK adspend figures enjoyed in recent years.

Despite ad expenditure rising to pounds 13.14 billion during 1997 - a 6

per cent leap in real terms - the effect of a strong pound on the UK’s

manufacturing industry will make such high increases difficult to

sustain, experts warn.

The figures, published by the Advertising Association, confirm a sixth

consecutive year of increase in adspend at constant prices.

At the same time, they show that advertising’s share of GDP has risen to

1.94 per cent, the highest figure for eight years and only marginally

below the all-time high of 1.96 per cent recorded in 1989.

But the healthy picture is being threatened by the problems bedevilling

manufacturing industry, which accounts for about 35 per cent of UK


’Manufacturing is on the edge of recession,’ Mike Waterson, the AA’s

research adviser, said. ’It’s had a wobbly year which may well be

reflected in next year’s figures.’

The AA’s statistics confirm the press as the most powerful magnet for

adspend, accounting for 53 per cent of total expenditure. TV is the

second largest medium with a 28 per cent share.

TV’s market share has remained virtually unchanged in the past decade,

although direct mail and press classified have recorded slight

increases. Press display, however, has dropped back.

The most significant success came in radio, which has seen its ad

revenue jump by 120 per cent in the past five years. However, it still

only has a share of around 3 per cent.

Andrew Brown, the AA’s director-general, predicted there would be a

’light bottoming out’ rather than a 1989-style slump. ’It’s likely that

adspend will be curtailed a bit but will be growing again by the year

2000,’ he said.

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