Buoyant mood in advertising market after London scoops 2012 Olympic Games
LONDON - There was a buoyant mood in the UK advertising market after London's victory in the battle to win the right to stage the 2012 Olympic Games, which it won yesterday.
Shares in the UK's biggest advertising company, WPP Group, rose by 1.1% to 598.5p in the afternoon, as analysts forecast a spike in advertising during 2011 and 2012, based on trends seen for previous Olympic games.
WPP chief executive Sir Martin Sorrell, who was in Sinagpore for the result, said: "2012 represents a major opportunity for our industry to show its capabilities."
The impact was not felt by US advertising groups, with Morgan Stanley pointing out that the location of such events was largely immaterial for global ad groups.
It is estimated that the games will generate as much as $1.2bn (£685m) in global advertising revenue with around £34m, or 5%, coming the UK's way.
On the Paris Bourse, the bad news that the French capital had lost out on hosting the event for the second time running hit media and advertising share prices, with the market in shock at the decision.
Publicis Groupe, whose namesake advertising agency handled advertising for the Paris bid, was down by 0.98% to €5.05 on the afternoon the bid was announced, while media owners Lagardere and TF1 fell by 0.5% and 1% respectively.
Havas, still without a chief executive after the recent tumult, bucked the trend to see its share price rise by 1.13% to €4.49.
Already benefiting from the win will be M&C Saatchi, the agency that handled the London 2012 advertising campaign. Research conducted by i to i showed that 35% of Londoners were able to recall unprompted the two slogans for the campaign: "Back the Bid" and "Make London Proud".
The good fortune is likely to buoy the agency in the face of the most important review in its history -- the £60m global British Airways account, for which it will repitch later this year.
Hill & Knowlton, part of the WPP Group, will also be adding the London 2012 bid to its list of case studies.
The same piece of research by i to i showed that attempts to counter negative publicity about the cost of the games was to a large degree successful. Registrations of support increased from 14% to 21% in London from January to May this year, and by the end of May topped 2m -- far exceeding the original target of 1m supporters by July 6.
Traditionally, UK advertisers have not embraced the Olympic games with the fervour of their counterparts in the US or sports-mad Australia.
In fact, a survey showed that during the Athens games last year, only 3% of marketing activity in the run-up to and during the event was related to the Olympics. This compared with a massive 70% by advertisers in Australia.
Global Olympic sponsors Coca-Cola, Panasonic, Kodak, McDonald's, Samsung, Visa and Xerox are expected up spending.
Instead, British marketers reserve their sporting spending sprees for football-related events, including the European championships and the World Cup. But with the event taking places on their doorstop, and seven years build-up to look forward to, the balance is bound to shift.
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