Adspend forecast for 2011 revised upwards

The Advertising Association and Warc have raised their forecast for 2011 adspend to 2.3% from 2% but cautioned the outlook "remains clouded by economic factors".

Forecasts: adspend set to improve in 2011
Forecasts: adspend set to improve in 2011

Risks in 2011 include the effect of government spending cuts as well as concerns about unemployment, which has resumed its upward trend according to official figures released this week.

AA and Warc have upwardly revised their estimate of 2010 adspend from the 5.4% predicted in September to 6.6%.

This would make 2010 the strongest year for adspend growth since 2004, but would only put expenditure back to the levels of 2003-2004 following several difficult years for the industry.

The VAT increase from 15% to 17.5% scheduled for January is expected to have led advertisers to bring spend forward into the fourth quarter of this year.

Suzy Young, data editor at Warc, said: "While UK adspend has exceeded all expectations so far in 2010, it's wise to remain cautious when looking to next year.

"We expect spend to increase by just over 2% in 2011, but there are risks ahead, especially with government spending cuts and concerns about unemployment."