Outlook is bright for UK advertising

Crystal ball gazing is always a notoriously risk business, but British advertisers have looked to the future and are upbeat about what they see, two leading industry reports have found.

The first report, from the World Advertising Research Centre, gives UK advertising one of its brightest outlooks to date, by suggesting growth of 36% over the coming decade.

Obtained by The Observer, the Centre’s full and most optimistic prediction states that the UK market could be worth £22bn in 2018, climbing from its current valuation of £16bn last year.

More pressing for today’s advertisers is the finding that despite a global slowdown in advertising in recent years, 2007 will represent a recovery that will be consolidated in the following two years.

As a result, growth is expected to peak in 2009, says the report, which was commissioned by the Advertising Association, which represents 31 trade bodies in the UK.

Beyond 2009, the London Olympic Games in 2012 is expected to provide a further boost, despite the restrictions, imposed on March, facing creative, marketing and ad professionals.

In the long-term, display advertising will grow from £11.2bn last year to £15.2bn in 2018, while classified advertising will leap from £3.5bn to £5.5bn over the same period.

The second report, also suggesting a rosy future for British advertising, was published last week by the Institute of Practitioners in Advertising.

It found that the majority of the IPA’s members are optimistic about their agency’s ability to grapple with the challenges industry faces.

Yet the report was hailed as a “wake-up call” to agencies, which must “get to grips” with non-traditional areas of marketing, “or face a shrinking business future.”

In a statement, the IPA said: “As traditional advertising continues to decline, by 2016, the hypothesis is that media owners of all kinds, including online search, all networks, gaming environments and interactive digital TV, will be integrating brands directly into content and editorial.”

By 2016, traditional advertising will shrink at the expense of consumer-influenced content and brand–influenced editorial so agencies will need to both innovate and evolve into new territory, the IPA said.

“New freedoms in the delivery of content, data and channels will provide new business opportunities whilst still maintaining the overriding focus on brand creation and development.”

As a result, ad agencies will need to take on multiple roles such as being an agency as media brand owner, an agency as content collaborator, and an agency as data provider, among others.

“If agencies don’t take these opportunities,” the institute warned, “there will be tremendous implications in terms of their relationships with clients, their remuneration packages and their very existence.”

Said Andrew Walmsley, founder of ad agency I-Level, said: “In the last few years we’ve seen quite staggering amounts of change, change in the way that consumers can see the media, can see the product, and changes in the way that the economics of markets operate.

“These are really quite fundamental shifts, and they’re not going to go backwards. If anything they are accelerating.”
David Pattison, IPA President, reflected: “During my time as IPA President, I have talked a lot about ‘putting the business back into the ad business.’

“While this is very appropriate for the short and medium-term, long term planning is also essential if we are to maintain our world leading position.”


15th January 2007

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