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.

£m YoY % change
2010f 2011f 2010f 2011f
TV 3,329 3,429 11.6 3.0
Radio 364 379 6.0 4.1
         
National newspapers 1,292 1,317 -1.5 1.9
Regional newspapers 1,346 1,287 -7.3 -4.4
Consumer magazines 480 471 -5.0 -1.9
B2B magazines 423 397 -9.9 -6.1
         
Outdoor 666 706 6.5 5.9
Cinema 192 197 5.4 2.6
Internet 3,701 3,988 7.1 7.8
Mobile 55 75 46.3 36.4
Total Group 11,849 12,245 4.2 3.3

For further information about the report (price £200 or available as part of our online
service, Oracle) please contact Adam Smith at adam.smith@groupm.com, +44 (0)20 7969
4083.


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