Called UK Television Forecasts, the report predicts television advertising revenues will grow at a rate of 2% next year, but will fail to grow any more than between 1%-2% for the remainder of the forecast period, which ends in 2012.
However, despite this growth, TV's overall share of advertising revenues will decline from 27.2% in 2006 to 22.7% in 2012.
The government and Ofcom will welcome the report's optimistic outlook on digital conversion, which it predicts will be almost complete before the end of the analogue switch-off date in 2012.
ZenithOptimedia said it expects 88% of UK households to receive digital television by the end this year and to reach 100% in 2010, two years before analogue switch-off. At the end of 2006, 78% of UK households received digital television.
In line with the growth of digital television, the report forecasts the advertising revenues generated by the digital offshoots of the main terrestrial channels.
Channel 4's multi-channel stations, E4, More4 and Film4, should offset a 2% decline in the main channel's revenues in 2007, with the group's advertising revenues expected to grow by 1%.
Five is also expected to offset a decline on its flagship channel through the performance of Five Life and Five US, turning a 3% drop in revenue at the main channel to a 2% increase for the group as a whole.
However, ITV's four digital channels are not growing fast enough to make up for its flagship channel, ITV1. The report expects ITV1 advertising revenues to shrink by 7% in 2007, and for revenues to shrink by 4% across all ITV-branded channels.
The report said television advertising is at its cheapest since the early Eighties, when adjusted for inflation, because of weak demand and fast-expanding supply through the increasing popularity of digital television. Prices fell by 6.5% in 2006 and are expected to fall another 1.4% this year.
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