WPP media buyer Group M has slashed its growth forecast for total UK adspend in 2011 from 3.6 per cent to just 1.5 per cent.
It says UK TV growth will be just one per cent (from a previous forecast of four per cent) while newspapers are set to take a terrible beating with national papers dropping 4.1 per cent and regional newspapers 12.6 per cent.
Magazines will drop 7.2 per cent with business to business titles falling ten per cent.
“Real household disposable income is presently the same as it was in 2008 thanks to wage deflation and the tax/benefit squeeze,” says Adam Smith (no relation presumably) of Group M. “And it is going to get worse before it gets better. 2011’s UK retail sales slowdown has put a brake on advertising, at least short-term. We always expected 2011 would be fundamentally tougher, but have had to reduce our previous forecast.”
This is all grim stuff but hardly surprising given the hardly secret events that Smith describes.
One might ask why Group M didn’t notice them before as they’re in the forecasting business.
Under the current coalition government the UK economy is enduring an even more savage squeeze than Conservative PM Margaret Thatcher and her chancellor Sir Geoffrey Howe unleashed on the UK after the 1979 general election.
It would therefore not be surprising if the next prediction to emerge from one of the big media buyers forecasts a substantial drop in UK adspend in 2011 compared to 2010, making last year’s supposed recovery the proverbial ‘dead cat bounce.’
Any such development would almost certainly lead to the closure of one or more national newspapers, a further exodus of business to business magazines from print to online only and a lot of ad agencies, particularly those dependent on retail business, going bust.
As for the UK’s regional press, it looks dead in the water already.