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
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