AA's figures reveal first drop in adspend for nine years

The recession's impact on Britain's advertising industry is reflected in new figures showing a 2.6 per cent drop in adspend during 2001, following nine years of uninterrupted growth.

But industry leaders believe the worst is over, with TV revenues set for a boost from the World Cup and multinational advertisers drawing confidence from the improving US economy.

The new figures, compiled for the Advertising Association by the World Advertising Research Centre, represent a 4.4 per cent decline following adjustments for inflation.

Andrew Brown, the AA's director-general, said: "There's a cautious optimism that the corner has been turned but these figures show just how nasty last year was."

Cinema - one of the few sectors to buck last year's trend - saw its ad revenue soar by 28 per cent to £164 million thanks to its heavy investment in multiplexes and the success of films such as Harry Potter and Lord of the Rings.

Internet advertising also flourished, its ad revenues increasing by 7 per cent to £166 million.

But even that was surpassed by directory advertising which was confirmed as the fastest growing press sector in 2001 with a 10 per cent improvement on the previous year.

That success extends a period of sustained growth stretching back two decades and reflects the massive increase in the number of small businesses.

TV saw its ad revenue tumble by 10.7 per cent last year. But Brown said: "There are some encouraging signs - albeit modest ones - that the worst may be over."