Zenith Media predicts growth in UK adspend

Zenith Media's global advertising expenditure forecast reveals that

while the US is expected to experience a fractional decline in real

advertising spend this year for the first time since the early 90s, the

UK is likely to experience a fairly stable economy and nominal

advertising growth.



The sectors helping to boost the UK's advertising spend will be the

newspaper, outdoor and radio markets, while TV will continue to have a

tough time.



Zenith believes that indicators such as strong retail sales, mortgage

lending and consumer confidence in the first few months of this year

bode well for the UK economy.



The UK's largest media agency predicts that UK advertising will grow 1.3

per cent in real terms in 2001, and this outlook will only be threatened

if there is a prolonged downturn in continental Europe and the US.



National newspaper display revenue is predicted to grow between 3 and 5

per cent every year over the next five years, fuelled by growth in

colour advertising, while classified advertising in this sector will

grow 3 per cent.



Regional newspaper advertising will experience growth in the retail,

grocery and household equipment advertising markets, while outdoor will

be buoyed by traditional advertisers. Radio growth has been revised down

from 15 per cent to just 8 per cent this year but Zenith points to

strong advertiser commitment in the second half of 2001.



In the TV market Zenith says that ITV will have to stoke up a growth in

advertising of 13 per cent in the second half of this year if it is to

achieve some sort of parity with last year, which it feels is a 'tall

order'. It predicts, however, that advertising revenue will recover next

year and in 2003 due to a slowdown in TV inflation.



Adam Smith, the head of knowledge management at Zenith Media, said: 'We

are hoping that the general advertising economy will avoid

recession.



Our confidence doesn't seem to be wavering. In the US we have lost a big

chunk of advertising, but it is off a much higher base.'



Zenith has revised its forecast made last December for the US

advertising market this year and halved the growth in major media

expenditure to just 2.4 per cent, which equates to zero after taking

into account retail price inflation.



Significant factors contributing to this US downturn is the slowdown in

growth of network television which is suffering from national

advertisers being reluctant to invest money into this area. Spot TV

advertising is also suffering.



One sector which is still growing, however, is the US online advertising

market and globally this continues to grow strongly.



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