Static adspend forecasted for 2003

UK ad expenditure is expected to remain virtually static for the second year in succession with recovery in the US market not translating into similar growth here.

Adspend for 2003 will rise by just 0.4 per cent to $15.28 billion, according to forecasts from ZenithOptimedia, compared with an increase of 2.8 per cent in North America.

In real terms, ZenithOptimedia predicts adspend in the UK will actually fall by 2.6 per cent and blamed sluggish economic growth and excessive numbers of public-sector jobs funded by taxation.

However, it predicts better growth in 2004 with UK ad revenues rising 3.2 per cent to $15.77 billion, which translates to 1.1 per cent in real terms.

ZenithOptimedia said enthusiasm in the US TV market, manifested in the upfront trading, was not replicated in the UK. It is predicting a 1.4 per cent rise in TV spend for the fourth quarter that would balance out declines over the first three quarters.

Radio is expected to boom in the second half of the year with growth of up to 5 per cent in revenues because of the de-regulation of telephone directory services creating new advertisers and growth in spend from FMCG companies.

ZenithOptimedia is predicting no growth for national press in 2003 but a slight uplift in 2004, blaming the effects of the Iraq war.

Greg Grimmer, the commercial director at ZenithOptimedia, said: "While we are unable to forecast the next revenue bubble, the benefit that we are finding is that static media pricing is giving clients greater confidence in predicting effective returns from their media investment."