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A mediaguardian report says that the UK advertising market is shrinking
faster than any of the other big five economies with "no prospect"
of a recovery in the ailing television market.
The report adds that the media giant issued a stark warning to
the UK government in its latest report, saying the UK will miss
out on any imminent recovery because of slowing consumer demand
caused by high taxes and sluggish economic growth.
"Unlike the United States' 'jobless recovery', the UK, seemingly
determined to emulate the slow-mo eurozone model, is condemning
itself to sluggish economic growth by creating too many unproductive
public-sector jobs financed by excessive taxation," the Zenith
Optimedia report says.
"Consumer spending power is therefore eroding, and consumer
demand is consequently expected to slow from 2.8 per cent growth
this year to 1.3 per cent next. The UK ad market is shrinking fastest
of the big five, and will be a slow grower in 2004."
"The TV market is notably uninfected by the upfront enthusiasm
in the US - having endured the worst share loss of any medium since
1999, with no prospect of restoring its real revenue within this
forecast period," said the report.
Worldwide growth is being driven by the US, where Zenith sees signs
of an upturn in magazine and television advertising.
But it warned this would not be enough to "propel the US ad
market single-handedly", and said it did not point to a strengthening
of TV advertising in Europe.
"Even if the whole $9bn does get spent (a good part is cancellable),
it is still only six per cent of US media. And we do not know how
much of it is new money as opposed to a redistribution of budgets
between the many species of American TV airtime," the report
said.
"A hot upfront is a symptom of the growing scarcity of big
audiences particular to the USA. No other large country has, or
has in near prospect, such imbalanced demand and supply. On the
contrary, TV pricing in western Europe remains soft." Zenith
said both the outbreak of SARS and the war in Iraq had dented global
ad revenues earlier this year.
But it pointed out that the only countries to have suffered sharp
downturns were those directly affected, including Hong Kong, Singapore,
Taiwan and Saudi Arabia.
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