The Opera forecast paints a much rosier picture than recent forecasts, with display advertising expected to grow by 4.5%, total UK ad spend to top £15bn in 2010 and online ad share to reach 10% by 2007 - a year which will also see spending on out-of-home to exceed £1bn (see story below). Revenue growth for 2005 is predicted at 2.5%.
Its upbeat assessment is in marked contrast to a recent quarterly report from ZenithOptimedia, which forecast 2.7% ad growth rate, significantly lower than the 4.9% it tipped at the beginning of the year.
However, the Opera report predicts tough times ahead for radio advertising with revenue declines - from £624m in 2004 to £587m in 2006 - and says the sector is in its most difficult position for 15 years.
Hard times are forecast too for the red-top newspapers, with continuing circulation falls, predicted at 3.5% in 2006. The report foresees a "turbulent year" for national newspapers next year, with only the qualities that have converted to tabloid or Berliner continuing to do well, and with The Daily Telegraph coming under increasing pressure to conform. Mid-market papers are expected to suffer declines of 2% to 3.5%.
ITV1's overall share of TV revenue is expected to slump from this year's 46.8% to 43.3% in 2006 in a market expected to grow 2.5%. Multichannel revenues are expected to be up 15% in 2006.
The consumer magazine sector will see "more launches", but warns of a potential weakening of the relationship between titles and their readers.
Opera says its ad growth forecasts are based on an assessment of the UK's overall economic performance and the factors driving advertising expenditure - consumer spending, company profitability and major public events.
"This figure reflects relatively fragile consumer demand, offset by generally robust profitability, the added benefit from the World Cup to be held in Germany next year and the generally bright economic outlook towards the end of 2006," it says.
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