GroupM to forecast 4% lift in UK ad spend for 2011

Crystal Ball
It’s coming
to that time of the year again when crystal balls are dusted off and the
world’s media powerhouses pool their internal insights to give us their best
predictions for the coming year.

Putting
yourself out there as an industry forecaster can be a thankless task at the
best of times, but following the worst advertising recession in living memory,
muddied by apparent global decoupling, a banking crisis and the relentless
onset of all things digital, and it’s proved to be a treacherous business indeed.

Not one
analyst or agency expected the country’s advertising market to rebound like it has
over the past 12 months.

Last
December, media’s leading forecasters, WPP’s GroupM and Publicis Groupe’s ZenithOptimedia, unveiled near
identical advertising outlooks for 2010, with a muted ‘0% growth’ tipped for
the UK.

Fast
forward 12 months and both have proved, thankfully, far removed from reality.
For once, the media operations run by Sir Martin Sorrell and Maurice Levy stand
accused of not being anywhere near bullish enough.According
to sources, GroupM is soon set to reveal that ad spend in the UK is set to
hit around 7% growth in 2010. Zenith’s figures are likely to concur.

Of course,
the media leaders are not alone in being totally thrown by the recession. And
what these predictions still provide is a reliable snapshot of the prevailing mood at the time of publication.

This time
last year, many a magazine was closed (!), media plan shelved or restructure
ordered on the basis that 2010 was going to be yet another brutally tough year. I
wonder how many would have survived if we’d known we were looking at a +7?


For what it’s worth, GroupM is expected to forecast another rise in the region
of 4% for UK ad spend in 2011, according to sources, while Zenith’s is likely to be closer to 3%. Growth is expected to be led by digital and outdoor – with hikes in the region of 8% and 6%
respectively.

TV spend is likely to be tipped at around 4% while radio spend is set to
tumble by more than 50% year-on-year as the Government’s much reduced COI
spend begins to take its toll.


Let’s hope next year is another 7% better than expected, somehow I doubt it.

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    Hi Arif

    Please could you double-check your figures, as there is absolutely no way that radio spend will ‘tumble by more than 50%’ in 2011.

    Whilst I acknowledge that the reduction in COI spend presents radio (and, let’s not forget, other media) with a challenge, it is one that we have already faced since Q1 this year – across which time radio has posted two quarters of yoy growth.

    Thanks,

    Mark

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    Hi Mark, shocking I know, but I’m led to be believe in Q1 2011 UK radio spend could be down by as much as half yoy.

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    I’m not sure who led you to believe this but to put their claims into perspective, NMR shows that COI represented c. 17% of radio spend in Q1 2010. So there’s no way that radio will suffer this level of decline (if any at all) even looking at a worse case scenario of no COI spend and no new advertisers to replace them, which is unlikely based on the experience of Q2 & Q3 this year.

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    GroupM has just published its forecasts for 2010 and 2011, how did I do? My tip of around 7% for this year was fairly spot on – today’s report says 7.7% – and expected growth in the region of 4% for next year also rang true – with 3.6% forecast.

    Next year’s fastest growing media were also identified as digital and outdoor, in the region I specified – 7.1% and 6.1%.

    However, I have to hold my hands up and say when it comes to radio I made a howler. Getting giddy with talk of more than 50% drops in COI spend, I incorrectly attributed this to overall radio spend. Radio has actually largely managed to replace lost COI revenue in 2010, driven by returning spend from auto and finance categories.

    Mark, many thanks for flagging my dubious call at the time – it’s good to be reminded that our readers are the real experts and practitioners.