This Year Next Year UK - Summer 2010
3 June, 2010
We revise our 2010 UK media investment forecast up again from zero growth (December) and -3% a year ago to +4%, with +3% to follow in 2011. This improvement is in line with other
mature markets. Economic fundamentals are too poor to justify more enthusiasm, but
advertiser confidence has tangibly improved in 2010. To rebuild brands is natural in the
aftermath of recession, though we failed to predict the resulting bottleneck and consequent
inflation in TV ad prices from March, and which explains much of our uplift. TV inflation is
always disruptive and usually expensive for TV advertisers, but for broader context, even our
revised figures show total advertising investment for 2010 still about £1 billion below 2008.
Other traditional media have also enjoyed better than expected recovery in the first half of 2010 but their price stability compared to TV is evidence of this being more of a spike than a trend. Online continues to outperform as related creativity, analysis and technology advance.
We had imagined that having fallen fastest, the cars and finance categories would lead
recovery, but it has been general so far. These two categories may yet support a second leg to UK ad recovery. It could certainly do with one. Two categories on watch are retail and
government. At just over £1bn (Nielsen, fiscal 2009/10) retail was the no 3 category and top
grower (+12% yoy); government was no 4 on £724 m (-2%) and had already been routinely
curbed during the election campaign before the new government made it an element of a £1.5
bn package of in-year savings for fiscal 2010/11.
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