GroupM Downgrades U.K. Ad Forecasts

LONDON, July 1: GroupM,
the parent company to the WPP media agencies Mediaedge:cia and MindShare, among
others, has lowered its forecasts for adspend growth in the U.K. from 6 percent
to 4 percent, with just a 3-percent increase expected for 2009, assuming “no
big deterioration in consumer confidence.”

The GroupM forecast, This
Year Next Year, notes that the
next 18 months “could turn toxic if negative equity and unemployment become
serious worries.”

The 4-percent and
3-percent gains for 2008 and 2009, respectively, will be led by the Internet,
with GroupM forecasting a 2-percent fall for traditional media adspend. Adam
Smith, GroupM’s futures director and compiler of the report, noted:
“Traditional U.K. media advertising (i.e., everything but the Internet) has
actually lagged well behind the economy for a decade now, through boom and
bust. This is because of much harder competition for audience and advertisers
within each medium and against the Internet. From the advertiser’s perspective,
U.K. media is much more competitive and productive than it was in any prior
boom or bust. If media cannot win the investment-versus-cost argument at these
prices, it never will.”

TV adspend is expected to
be down 2 percent this year and next, while the Internet will be up 27 percent
this year and 20 percent in 2009.

—By Mansha Daswani