Fiona Ramsay, Media Week, 10 June 2008, 07:30am

Companies braced for slump in TV and radio 2008 ad spend

LONDON - Agencies and broadcasters are pinning their hopes on a high street-led economic upturn later in the year, after it emerged TV ad spend could be down by 2% this year, while radio ad spend could fall by as much as 12% over Q2.

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In the TV sector, sales houses are relying on a strong second half to prevent an even deeper decline.

Martin Plant, executive sales director at TV sales house IDS, said: "TV ad spend will be down around 1.5% over the year, but some are predicting declines of 2% or more. From our conversations with agencies, it feels like there is a little bit of panic going around. The thing that is less positive is that there is a lack of consumer confidence, which might manifest itself on the high street."

OMD UK deputy head of TV Matthew Wigham said: "After predictions of a flat market, we have down-weighted it to fall 1-2%. It depends on the economy though - it could go either way."
One head of TV investment expected the market to become "really difficult over the next six months".

Five sales director Kelly Williams commented: "A lot depends on how the retail sector performs, so it is too early to say how the year looks."

Within radio, meanwhile, national advertisers' radio ad spend is predicted to be down by 12% year-on-year in Q2, as the credit crunch takes its toll on advertisers' and consumers' confidence.

According to one radio ad sales chief, national advertisers' spend on the medium was down 13% in April and 14% in May, leaving Q2 on track to be down 12% over the quarter.

Simon Redican, managing director of the Radio Advertising Bureau, said: "It's been a tough second quarter, but it's tough across all sectors because of the credit crunch."

Amanda Barrett, radio engagement specialist at Universal McCann, added: "There has been nervousness in the market and clients need to be more scrupulous with marketing budgets. There is a lot of pressure to show return on investment. Clients are holding back some budgets, but I don't think that trend will continue."