UK adspend set for steady growth

Continuing economic recovery is set to boost total UK advertising expenditure by a further 6.9 per cent this year and 5.9 per cent in 1998, according to the latest forecasts from Zenith Media.

Continuing economic recovery is set to boost total UK advertising

expenditure by a further 6.9 per cent this year and 5.9 per cent in

1998, according to the latest forecasts from Zenith Media.



According to the Zenith figures, advertising accounted for pounds 10.5

billion - 1.4 per cent of the UK’s gross domestic product - last year,

and this is forecast to grow to pounds 15.1 billion - 1.5 per cent of

GDP - by 2003.



TV’s share of ad budgets remained static last year, with expenditure in

the medium rising by about 7 per cent. TV revenues are forecast to rise

5.8 per cent in 1997. However, ITV’s ad revenue is expected to increase

by just 1 per cent this year to pounds 1.675 billion and growing

competition from other commercial channels means that the network’s

revenues will decline in real terms every year. By 2003 ITV’s revenue is

forecast to fall to pounds 1.465 billion.



Channel 4’s performance is expected to fall back, with increased

competition dragging ad revenue growth for 1997 back to 1.2 per cent, at

pounds 495 million.



The channel’s revenue is likely to remain at around a fifth of

terrestrial revenue through to 2003.



Zenith has scaled back its audience share and revenue forecasts for

Channel 5, given that just 50 per cent of homes are expected to be tuned

in as an average for the year. It predicts Channel 5 will attract pounds

80 million in ad revenue and a 5 per cent share of the commercial TV

audience.



Forecasts for satellite television have also been scaled down because of

the sluggish rate at which homes are converting to cable TV. Zenith

predicts overall penetration of satellite TV in UK homes will be 37 per

cent by 2003.



Graham Duff, Zenith’s chief executive, said: ’The outlook for

advertising has strengthened on the back of continued economic

recovery.’



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