AA: Adspend set for decade of growth

Reports of the death of adspend growth have been greatly exaggerated, according to the Advertising Association, which instead predicts that it will increase by a third during the next decade.

Forecasters suggest TV and press advertising will increase by between 10 per cent and 25 per cent in real terms between 2004 and 2016. Outdoor and radio are expected to do even better, with growth rates of between 30 per cent and 50 per cent forecast.

However, internet advertising is likely to record the most spectacular growth levels, albeit from a small base. The AA suggests growth in the online sector could be as high as 300 per cent.

Dismissing predictions of faltering growth in spend as "alarmist", Andrew Brown, the AA's director-general, said: "The economic forces that drive adspend are likely to continue to be positive for the forseeable future."

In the absence of major threats to advertising, the AA believes real growth will increase by 33 per cent between now and 2014. Even if adspend is hit by the continued growth of the internet and the increased fragmentation of television audiences, real growth of 25 per cent is still likely, it added.

The AA's optimism runs counter to that of pundits who, since recession kicked in four years ago, have been suggesting TV spend would go into freefall and there would be a mass migration of adspend into other forms of promotion. But Brown said: "It seems to me we have never lost one medium through the arrival of another. All we get is an increased choice."

The more confident outlook is in line with other positive signs. The most recent Bellwether Report from the IPA showed the longest period of continuous adspend growth since recession began.

At the same time, ZenithOptimedia has predicted that the UK is returning to the kind of growth not seen since before the telecommunications and media technology bubble of the late 90s.

Brown added: "All this isn't to pretend that everything in the garden is rosy. But we shouldn't get too downcast simply because we have been through such a horrid time."

PRESS FORECAST

Year Optimist's view Pessimist's view

Total Display Classified Total Display Classified

(pounds m) (pounds m)

2004 15,850 11,650 4,200 15,750 11,624 4,126

2014 21,000 15,792 5,208 19,650 15,170 4,480

Source: The World Advertising Research Center.