Boom time for advertising

23Aug07

Source: Lara Sinclair, The Australian

ADVERTISING industry growth could approach 10 per cent this year, putting the sector firmly back into boom times.

According to recent revised forecasts the sector will push well above $11 billion.

Yesterday Fusion Strategy revised its 2007 growth forecast up from 8.43 per cent to 9.23 per cent, thanks to stronger-than-expected first-half spending on television, radio, outdoor and cinema advertising.

Forecaster Steve Allen said that while his initial forecast was greeted with mirth last year, consistent retail sales growth had created a strong marketing and advertising climate in the six months to June that would slow only marginally over the full year.

Citibank is understood to have predicted growth of 9.1 per cent.

WPP’s media-buying alliance GroupM has also revised its numbers strongly upwards to 6.9 per cent for the full year, while Mitchell & Partners is tipping 7 per cent to 8 per cent growth until the end of 2008, spurred by the Beijing Olympics.

"Radio and TV, and maybe even magazines, are stronger than we originally forecast and online slightly weaker," Mr Allen said. "We also hear that newspapers might be trending a bit ahead of (our unchanged 1.48 per cent forecast)."

Mr Allen commended newspaper publishers for their $10 million advertising campaign aimed at persuading advertisers to use the medium, but predicted it would take a year to be seen in the sector’s revenue numbers.

The metropolitan radio industry grew by 8.2 per cent in the seven months to July, while audited free-to-air revenue numbers showed growth of 6.6 per cent to June, both higher than Fusion’s predictions.

Mr Allen tipped that online spending would grow by 50.35 per cent, down from his initial forecast of 54.4 per cent, and that the $212 million pay-TV sector would slow from 32 per cent growth last year to 24.35 per cent.

GroupM is tipping slower but buoyant, growth of 36 per cent and 24 per cent respectively in online and pay-TV.

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