Carat cuts UK ad spend forecast

by Tristan O'Carroll, Media Week 27-Aug-08, 10:30

LONDON - Carat has revised downward its forecasts for UK advertising spend in 2008 and 2009, as it also cut its prediction for worldwide ad spend expansion in 2008 by 1.1% to 4.9%.

In March, Carat forecast that UK ad spend would increase by 4.3% this year and 4.4% next year. Factoring in a change in its methodology in the UK, whereby its current forecast now includes classified press ad spend, Carat now forecasts that UK ad spend will rise by only 2.5% in 2008 and 2.2% next year.

Jerry Buhlmann, chief executive of Carat parent Aegis Media, said: "It's clear that the worldwide economic issues affecting businesses are having an impact on where and how advertisers spend their money.

"It is also significant that the US and the UK, as the highest spenders on advertising in their regions, are showing reductions in our forecasts. But overall, the picture is still one of growth."

Worldwide by media sector, Carat said that global press spend would drop 0.8% this year and by 0.2% next year.

However, all other sectors are predicted to expand over the next two years. Worldwide TV ad spend is forecast to rise by 5.9% this year and by 5.5% in 2009. Global Internet ad spend is tipped to increase by 23.7% this year and by 18.6% next year.

Buhlmann added: "Similarly, while TV's share of spend has stabilised, internet advertising is continuing to drive spending ahead of other sectors in nearly every region.

"Internet is set to overtake radio this year to become the world's third most popular medium, behind TV and print. But changes in consumer behaviour aren't the only reason for this. With search now central to the planning and execution of any campaign, online media brings a greater level of accountability not just to itself, but also to TV, print and other forms of advertising.

"This is why we are predicting further strong growth for the internet, even when advertisers are cautious in many of the other sectors," Buhlman concluded.