Analysts fear that a return to recession next year could bring an
end to the record UK adspend figures enjoyed in recent years.
Despite ad expenditure rising to pounds 13.14 billion during 1997 - a 6
per cent leap in real terms - the effect of a strong pound on the UK’s
manufacturing industry will make such high increases difficult to
sustain, experts warn.
The figures, published by the Advertising Association, confirm a sixth
consecutive year of increase in adspend at constant prices.
At the same time, they show that advertising’s share of GDP has risen to
1.94 per cent, the highest figure for eight years and only marginally
below the all-time high of 1.96 per cent recorded in 1989.
But the healthy picture is being threatened by the problems bedevilling
manufacturing industry, which accounts for about 35 per cent of UK
’Manufacturing is on the edge of recession,’ Mike Waterson, the AA’s
research adviser, said. ’It’s had a wobbly year which may well be
reflected in next year’s figures.’
The AA’s statistics confirm the press as the most powerful magnet for
adspend, accounting for 53 per cent of total expenditure. TV is the
second largest medium with a 28 per cent share.
TV’s market share has remained virtually unchanged in the past decade,
although direct mail and press classified have recorded slight
increases. Press display, however, has dropped back.
The most significant success came in radio, which has seen its ad
revenue jump by 120 per cent in the past five years. However, it still
only has a share of around 3 per cent.
Andrew Brown, the AA’s director-general, predicted there would be a
’light bottoming out’ rather than a 1989-style slump. ’It’s likely that
adspend will be curtailed a bit but will be growing again by the year
2000,’ he said.