Outlook poor for TV ad spend says Zenith

LONDON - UK television ad spend will decline this year and next, and growth will not return to the medium until 2012, according to ZenithOptimedia.

Decline: ZenithOptimedia predicts TV ad spend will not increase until 2010 at the earliest
Decline: ZenithOptimedia predicts TV ad spend will not increase until 2010 at the earliest

Zenith’s UK Television Forecasts to 2012 report predicts that ad revenues at the main terrestrial channels - ITV1, Channel 4 and Five - will fall 7% in 2009. Their digital spin-off channels will increase revenues by 10%, it predicts, but this will not be enough to compensate. We expect total revenues to these broadcasters to fall 4%, the report concludes.

UK TV ad spend is tipped to fall by 6% this year and 3% next year, before returning to growth, of 2%, in 2010 and 1% in 2011.

Zenith added: The long-term prospects for the UK’s television market are poor: we do not expect any growth until 2010, and even then, we expect growth to remain at or below the rate of inflation for the rest of our forecast period to 2012.

The report notes that it is the main terrestrial channels that are weighing down the market. Zenith forecasts cheaper digital TV channels will increase their ad revenues by 6% in 2009, and grow by an average of 8% a year to 2012.

The recent rapid rise in supply of commercial impacts – wrought by the rise in digital television uptake - in conjunction with weak demand, has pushed the price of TV advertising down by nearly a third since 2000.

At £4.81 per thousand adults, a 30-second spot costs the same as it did in 1994, and is 29% cheaper than in the peak year of 2000. After adjusting for inflation, airtime in 2008 is now at its cheapest we have on record, Zenith forecasts.

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