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RSSEvening Standard; London (UK)
By NICK GOODWAY
AN unexpected lack of demand for advertising during the World Cup has forced media buyer Carat, part of Aegis, to slash its forecasts for advertising spending growth in the UK this year from 4.5% to just 3.2%.
That is a rapid slowdown on the back of the 5.5% growth seen in 2005 and below even the 4.6% growth forecast for 2006.
ITV is reckoned to have suffered by far the biggest blow with ITV1, its flagship channel, predicted by some ad agencies to take a 20% hit with revenues falling below Pounds 100 million in a single month for the first time for 12 years. The entire UK TV ads market is expected to be down by 13% in July.
Steve Hobbs, head of media at Carat UK, said: "To a certain extent, the World Cup has helped ITV to hold up its advertising revenues during June but that means that July and August are going to be pretty disastrous. We reckon all TV will be down by 10% in those months and, of course, ITV 1 will be worse hit than that."
Much still depends on England's progress through the next rounds of the tournament, with discretionaryspend advertisers such as supermarkets, drinks companies and takeaway food merchants likely to increase their outlay markedly according to the team's success.
Hobbs pointed out: "What it does mean is that there is some really good-value advertising airtime out there at the moment and for the next few months. Advertisers should be able to find some real bargains because the broadcasters and publishers are desperate for cash."
The cut in its UK growth forecast is not matched in the rest of the world with Carat only trimming its global growth forecast from 5.8% to 5.7%. Its forecast for the United States is unchanged at 5% Europe's growth is chopped from 4.8% to 4.5%, thanks mainly to the UK. France is seen as one of the few countries to have benefited from the World Cup effect although that may dry up as quickly as its team's shots on goal.
In Germany, the tournament has had little net effect because advertisers have taken World Cup spending out of their normal marketing budgets. In Italy, the fragility of the economy-is more important than the strength of the Azzurri.
Aegis chief executive Robert Lerwill said: "The World Cup provides a mild positive but it doesn't change the game. The rise of digital advertising cannot be understated. It will endure long after the final whistle has blown in the Berlin Olympiastadion."
Internet advertising will overtake magazine advertising spend in the UK this year, according to Carat, and outstrip newspaper ad revenues in the US in 2008.
(c) 2006 Evening Standard; London (UK). Provided by ProQuest Information and Learning. All rights Reserved.
