Surveys predict boom period for ad industry

Britain's advertising industry is set for a bumper future with most companies poised to boost their adspend during the coming year and total budgets predicted to grow by more than 40 per cent during the next 12 years.

Britain's advertising industry is set for a bumper future with most companies poised to boost their adspend during the coming year and total budgets predicted to grow by more than 40 per cent during the next 12 years.

However, agencies are being hit by the current drop in confidence among clients, many of whom have revised their budgets downwards for the remainder of the year.

These are the main conclusions of surveys commissioned by the IPA and the Advertising Association into client spending patterns in the short and long term.

Both also forecast a future in which internet advertising will play a major part in driving growth. The number of companies devoting more than 5 per cent of their budgets to internet-related activities has almost doubled in the third quarter of the year.

Hamish Pringle, the IPA's director of marketing strategy, said: 'In 1999, commercial radio accounted for 5.5 per cent of all marketing expenditure and internet spend is well on the way to half that level.'

Andrew Brown, the AA's director-general, said advertising growth was set for a prosperous future on the back of excellent economic growth prospects.

But he warned that some existing media would have to get their 'technological acts' together if they were to cope with the internet's impact and the fragmentation of TV audiences.

The IPA's Bellwether report, produced for the IPA by NTC Research, is a quarterly survey among almost 300 UK-based companies. The AA's long-term ad expenditure forecast is based on expenditure trends to 2012 in nine media and seven product sectors.

The Bellwether findings pinpoint a decline in the growth of media adspend in the coming months; almost one in three of the surveyed companies have reduced their budgets.

Nevertheless, the AA predicts relentless growth in adspend - although it suggests that the internet might make large inroads into the classified ads market, which is a huge earner for quality national and regional newspapers and business magazines.

Commercial TV could also face losses as audience fragmentation makes it less attractive to advertisers.

The AA warns that all media, insulated by the next three prosperous years, should use the time to build their defences.



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