Ad Expenditure Forecast
October 19 2001
The Advertising Association has recently released its 2000 edition of the Long Term Advertising Expenditure Forecast. The research predicts that overall advertising expenditure could grow by more than 40% over the next 12 years.
The report, produced by media consultant Harold Lind, covers annual expenditure trends to 2012 in nine media (television, national and regional newspapers, consumer and business magazines, directories, outdoor, radio and cinema), and seven product sectors (recruitment, other classified, retail, industrial, financial/services, durables and consumables).
The overall level of advertising spend (excluding press production costs and direct mail) predicted up to the year 2012 reads as:
| | Current prices (high option) | Current prices (low option) |
| 2000 | 13,338 | 13,110 |
| 2006 | 17,702 | 15,766 |
| 2012 | 25,275 | 19,784 |
Commenting on the trends, Andrew Brown, the AA's Director-General, said "The good news is that there are excellent prospects of economic growth throughout the forecast period, with growth being somewhat higher and somewhat more stable than has been the norm in the past. Since advertising revenue usually follows the economy but is more volatile, this would normally suggest a generally prosperous future for the industry. This is roughly the scenario followed on the High Option of the forecast, which predicts over 40% real growth by 2012."
He continued by commenting that, "The more problematic issue, at least as far as some existing media are concerned, is that technological change is likely to have an impact on current revenue sources. The two key areas here, which the forecast considers, are the Internet and the fragmentation of TV audiences. The Internet might make large inroads into the classified advertising market, which provides a significant proportion of the revenue of media such as the quality national press, regional newspapers and business magazines. This is the assumption of the Low Option of the Forecast, which predicts advertising growth to be 12% over the period, compared to 43% on the High."
He also noted that, ".The function of a long-term forecast is less to predict than to warn. Growth trends in advertising can be estimated by the logical and econometric processes but, over a long time period, these can be affected by a variety of outside factors, at least some of which are in the hands of the people working in the industry. If they can recognise the scale of the threats and opportunities likely to arise over the next decade, they are in a better position to adapt their policies in good time to meet the challenges. This is particularly the case at present, since the advertising industry is at a crossroads, facing more fundamental change than at any time in the past fifty years."
The Advertising Association Long Term Advertising Forecast is available from NTC at the price of £995, or £495 for association members.
All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.
