Adspend is still falling but UK 'tide is turning'

Adspend in Britain is continuing to fall, but the worst may be over with client budgets set to rise in the wake of a growing world economy.

Although spending in the UK showed a nominal increase of 0.2 per cent to £3,376 million in the third quarter of 2003, the figure translates into a 2.6 per cent fall after adjusting for inflation, according to data published this week by the Advertising Association.

However, new forecasts from ZenithOptimedia suggest the tide is turning.

"We are growing more confident that the upside potential from here is greater than the downside risk of disappointment, global events permitting," John Perriss, the ZenithOptimedia chief executive, said.

National newspapers saw their third quarter ad revenue drop by 6.5 per cent to £428 million at constant prices while spending on TV dropped 4.1 per cent to £847 million.

Only the radio and outdoor sectors bucked the downward trend, posting rises of 5.7 per cent to £131 million and 3.6 per cent to £196 million respectively.

But ZenithOptimedia suggests that the tide is turning as the European football championships are expected to drive up TV revenue by 4 per cent next year and ITV faces a healthier future having arrested its loss of viewing share from the pay-TV sector and the BBC.

The company says it expects the recovery to be fuelled by the growth in pay-TV, which has the effect of making people watch more ads.

At the same time, it expects advertisers to be encouraged by the impending government review of the BBC, which is likely to lead to the corporation having to take its public-service duties more literally over the next two years.

The press market is expected to show marginal revenue increases next year, with recruitment and property advertising both likely to remain positive.

Meanwhile, a recovering economy will benefit regional newspapers, which derive two-thirds of their revenue from classified ads.

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