Forecasts warn of sharp fall in TV ad spend during 2009

Media

Emma Barnett

November 11, 2008

How long?

2-3 minutes

Forecasts warn of sharp fall in TV ad spend during 2009

LONDON - TV broadcasters are facing a prolonged period of TV ad spend decline, with both Billetts and Zenith predicting relatively sharp falls in TV ad spend next year.

According to Billetts, the media and marketing services outfit, TV ad spend is set to decline in the first two quarters of 2009 by between 9% and 10% year on year.

However, it expects the TV ad market to improve later in the year, with year-on-year declines of between 2% and 3% in the final two quarters of 2009.

Motoring and finance clients are predicted to reduce their ad spend on TV, whereas grocery retailers and FMCG clients are expected to continue to support TV.

Richard Hemming, head of insight at Billetts' parent Ebiquity, said: "It means tough times ahead, and media owners with strong offerings and competitive pricing will do well. However, many media owners will find trading conditions tough in the next 12 months."

Meanwhile, ZenithOptimedia has warned that UK television ad spend will decline this year and next, and further predicts that growth will not return to the medium until 2012.

Zenith's UK Television Forecasts to 2012 forecast 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 their revenues by 10%, it predicts, but this will not be enough to compensate for the decline in their core channels.

Publication of both sets of forecasts comes at the same time as new research warns that brands that pull back on ad spend face losing customers.

Within a year, according to Thinkbox, the TV marketing body, reducing share of advertising investment - in particular TV investment - is very likely to diminish a business's competitive position as consumers become less willing to pay for that brand.

The Thinkbox research, produced by PricewaterhouseCoopers, examined 700 brands across seven product categories. Sampling more than 2,500 adults, respondents gave their views on certain brand attributes and their willingness to pay for the brand itself.

In a separate piece of Thinkbox research, Data2Decisions found that brands that stop advertising on TV for one year will need five years to undo the damage that such a lack of exposure causes.

The data modelling consultancy was hired by Thinkbox to analyse and compare YouGov's Brand Index data and Nielsen's Ad Dynamix database of media spend, over three years and more than 1,000 brands.