Screen Digest forecasts UK advertising revenue to drop by 8.4% this year, as several client sectors such as finance, retail and motoring retract budgets.
TV advertising spend, it predicts, is set to decline by 7.7% in 2009, adding that analogue terrestrial TV ad spend will be hit hardest. It expects ad spend on both ITV1 and Channel 4 to be down 10%.
Screen Digest warns that Q2 will be the "lowest point" for the UK TV ad market, "with prices hitting a 20-year low". However, it predicts there will be "stabilisation" in ad spend over the second half of the year, "as some advertisers and agencies take advantage of low prices to increase their share of voice over competitors".
In the long term, the report concluded that a relaxation of Contract Rights Renewal and more liberal European regulation on product placement and ad-insertion rules "should help TV to a modest recovery".
Furthermore, major sporting events such as the football World Cup in 2010 and the London Olympics "will also help restore the fortunes of TV advertising", Screen Digest predicts.
Vincent Létang, head of advertising at Screen Digest and author of the report, said: "The UK TV advertising market is going to remain sluggish for a number of years and it will take the 2012 London Olympics to provide a strong boost. Only then will we see the growth rates we experienced at the beginning of this decade (plus 6% in 2012). Even by the end of 2012, the market will merely be back to its 2003 size (£3.2bn)."
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