AA figures suggest UK advertising market is stabilising

New figures suggesting that adspend in Britain is stabilising were greeted with cautious optimism by industry leaders this week.

Research carried out on behalf of the Advertising Association puts adspend in the UK for the second quarter of this year at £3,440 million. This is 1.1 per cent higher than the corresponding figure last year.

After adjusting for inflation using the retail price index, spending shows a small decline of 0.1 per cent.

"The figures suggest this could be the beginning of the end of the decline," Andrew Brown, the AA's director-general, said. "But if there's a war with Iraq, all bets are off."

Almost all ad sectors have shown a decline in real terms. However, television bucked the trend, with the World Cup contributing to a 5.4 per cent spend boost. The upswing is the first for almost two years.

Hamish Pringle, the IPA's director-general, cited the success of reality TV shows in attracting crucial but elusive 16- to 34-year-old viewers as a key reason for the medium's improving health. "Love them or hate them, they've done well for ITV," he said.

Expenditure on direct marketing also jumped by 9.7 per cent, reflecting a more tactical approach by advertisers during tough times.

Pringle predicted that this would be a permament shift as the growth in direct response television and text messaging led to the tighter targeting of consumers.

Some believe the figures from the AA suggest that Sir Martin Sorrell, WPP's group chief executive, is being too pessimistic in his prediction that the market will not improve significantly until 2004.

WPP believes that any real improvement in global spend will not occur until the US presidential election and the Athens Olympics in two years' time.

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