Comparing media sector adspend: 1987 vs 2017
A view from Mark Howley

Comparing media sector adspend: 1987 vs 2017

Zenith's UK chief executive explains how radio and outdoor spend has remained relatively consistent in a 30-year period of significant change in the industry.

At Zenith, we are celebrating the 30th continuous year of our Advertising Expenditure forecasts. As we release the forecasts quarterly, it is natural to look at the quarterly change or perhaps at best take a year-on-year view, but maybe in doing this we miss the bigger picture. The anniversary does allow us the opportunity to look at what has changed over 30 years, and indeed this paints a picture of a sector that has experienced huge flux, turbulence and dynamism.

To give some context, I’ll start at the beginning. The first adspend forecast was released in Autumn 1987; it was prompted by a feeling that the sector wasn’t being taken seriously by the financial markets, and the aim was to prove the scale of the advertising industry across the world. This was the first global forecast and the first agency forecast in the UK, so it really made waves. The contextual write-up of that first forecast shows that some things never change; we were looking forward to a boost from the 1988 Olympics and US elections, expected rapid growth in Asia Pacific outside Japan, and were worried about economic problems in Latin America.

We were also dealing with a much smaller global ad market; we estimated it at $187bn (£141bn), only a third of its current value. The US was extremely dominant, accounting for 59% of total spend – this sits at 35% today.

Looking back over the reports really shows how the shape of the industry has changed. Back in 1987, there was no competition in the (UK) TV industry, the newspaper industry was vast and hugely influential up and down the UK, and of course, there was no internet forecast – the birth of internet advertising was still seven years in the future and the first forecast didn’t come until 2002.

That year, we estimated internet ad spend at £162m, which ended up being a slight overestimate – it was £142m. Then came the real digital juggernaut – our predicted rise to £246m in 2005 looks naïve now, with the actual figure reaching £1,162m. It’s safe to say that we, along with pretty much everyone else, underestimated the growth potential of internet advertising, although we were occasionally accused of over exaggerating it. It’s hard to overplay the significance of those years in the noughties, but it’s testament to the adspend forecasts that with perfect hindsight we can see real accuracy in the forecasts over the years.

So how have different media fared over the last 30 years? Here are the headline numbers for the UK (adspend in £m at current prices):

* first figure for 1997

We can see from these that radio and outdoor are the mediums with the most consistency – both in steady growth, slightly out-performing total market growth. Cinema, along with (not surprisingly) internet advertising, is the one jumping ahead. And whilst the film industry was without doubt in the doldrums in the 1980s, the growth in advertising far outstrips the resurgence of cinema-going (admissions jump from 78 million to 168 million over this period, while advertising revenues have grown 1,183%). And the decline in newspaper and magazine advertising makes for stark reading – in 1987 62% of all advertising spend was invested in print, this has now just slipped under 10%.

As we look ahead to the next 30 years, it really is hard to say what we’ll be talking about as we celebrate the Zenith adspend forecasts’ 60th anniversary. As an industry we have challenges, but we’re also in a good place – the latest report confirmed an expected global growth of 4% this year. One thing is for sure though, the rollercoaster of change will continue, and I for one believe this is fundamentally what makes it an interesting sector to work in.

Mark Howley is UK chief executive at Zenith