RTL sees tough market for advertising in the year ahead

LONDON - RTL Group, which owns the majority of UK TV station Five, has said that the advertising market looks tough and that it does not see a sustained recovery underway at present, pouring cold water on hopes of a television ad revival.

The group, Europe's biggest television broadcaster, has said that the outlook for advertising across Europe this year remains uncertain.

There was bad news for the group with the performance of its German operations, which is the group's biggest market. It suffered its second yearly downturn in advertising.

There was one bright spot -- the performance of the UK's newest terrestrial network, Five. It described the channel's performance as "exceptional", with audience share and advertising market share growing strongly in the second half of the year.

Five's share of the advertising marketing in 2002 grew to 7.5%, compared with 6.4% the previous year, with audience share up to 6.5% for the year from 5.9% in 2001.

However, it remains to be seen how Five will perform now that the dynamic chief executive Dawn Airey has left the company for Rupert Murdoch's Sky Networks. RTL has still not named a replacement for Airey, who left late last year. Last week, Flextech chief executive Jane Lighting was tipped as the front-runner for the Five job.

Overall, the tone of RTL's trading statement was cautious.

Didier Bellens, chief executive of RTL Group, said: "In common with other European broadcasters, RTL Group continues to operate its businesses in a tough market for advertising and with little visibility on future advertising trends."

He added: "We have responded by focusing on improving the efficiency of our operations and working to realise the synergies available within the business. Cost controls have and are being implemented across the group, in both headquarters and operating companies, with the result that the overall cost base remains flat."

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