TV ad revenues 'to jump 10 per cent'

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The Independent Online

There was more good news for the beleaguered television industry as a second respected analysis group predicted that the advertising market would grow strongly this year despite the lack of visibility after the election.

Enders Analysis increased its growth forecast for net TV advertising revenues for 2010 for a second time this year, raising its prediction from 4 per cent in March to 10 per cent.

It did so less than a week after a rival research company, Screen Digest, raised its growth forecasts for the first half to 7 per cent. Its enthusiasm was dampened for the full year because of uncertainty about what will happen to the economy after the election.

Following declines of 16 per cent over the past two years, advertising revenues rose by 10 per cent in December, Enders said. While growth was slower at the start of the year, TV companies enjoyed a 20 per cent growth in ad revenues in March. April and May are expected to show similar improvement, and the World Cup is likely to see heavy promotional activity.

Enders said: "As a result, it is reasonable to expect year-on-year television net advertising revenue growth of 14 per cent to 15 per cent in the first half of 2010." The growth is expected to slow during the third quarter but Toby Syfret, an analyst at Enders, was reluctant to predict growth in the last three months of the year because of "lack of visibility on the post-election economic outlook, and tougher year-on-year comparatives". He warned: "The 10 per cent bounce-back we now anticipate for 2010 still falls somewhere short of making up for the 16 per cent decline across 2008 and 2009. We continue to believe consumption will weaken after the elections, potentially triggering a decline in economic activity."

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