An election, a wedding and an Easter bunny

There is a central assumption that 2005 will be an election year and that, having got past the royal wedding in April, 5 May will be the most likely date.

For advertisers, this can mean the election process impacting a naturally buoyant advertising regime.

This year, the election, unlike Easter, looks set to fall into the second quarter of the year. The impact of the timing of these two events prove highly disruptive.

Let's look at the outdoor advertising market, for example, usually a key medium for the political parties. While there is a general hope from investors that an election will boost demand for outdoor advertising space, and hence cause a rise in achieved prices, the opposite is often true.

The political parties are forced buyers ahead of the election. As a result, there is a tendency for other advertisers to schedule campaigns to avoid this period.

A game of cat and mouse ensues, with actual trading performances from the media owners being much less predictable than hoped.

Add to this the fact that Easter falls into the first quarter, and it could be that the strong start we have seen to the year, certainly in TV, may continue into March, boosted by both Easter and some drag forward of spend from the politically distorted April and May.

As a result, Q1 could look very good for the industry as a whole.

So what impact will this have on city perceptions? Well, it's quite conceivable that, with a strong start to the year being highlighted in the results season in March, the view for the full year will consequently be quite buoyant.

However, if the second quarter is quieter for the reasons given, this could roll into the seasonally more subdued Q3.

Add to this the fact that the new government will pour a dash of cold water on the economy in the form of a rise in taxes (already announced) to dampen consumer demand in 2006. This will take over as a drag on disposable income where the rise in interest rates has left off.

Quarters two and three may well prove to be distinctly lacklustre when compared to a buoyant Q1. With the timing of all these factors, 2005 may be shaping up to be another year where initial hopes prove too optimistic, being derailed by two troubled middle quarters.

Malcolm Morgan is a media analyst at Investec (UK)

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