Group M forecasts digital media will help drive rise in overall UK ad spend – but regional press in particular will suffer
Almost £400m in print advertising is forecast to be lost from the UK newspaper market by the end of 2014, with digital revenues only able to make up about 25% of this decline, according to a new report by Group M.
Group M, WPP's worldwide media buying operation, said that the total UK ad market is looking to be in relatively rude health this year, underpinned by an increase of more than £1bn of digital ad investment by the end of 2014.
The UK ad economy is expected to grow 3.3% this year to £13bn, underpinned by the huge appetite for digital media spend which will increase by £1.24bn by the end of 2014.
However, Group M forecasts that UK press ad spend "remains under the most pressure" of all advertising sectors in the UK.
The total UK newspaper market is projected to shrink by 8.2% this year, or £186m, to £2.06bn.
This is an improvement over the decline of 10.2% in national and regional newspaper advertising in 2012.
However, early Group M estimates for 2014 show that this improvement is fleeting, and not a sign that the decline in the newspaper print ad market is abating.
In 2014, total newspaper print advertising is expected to fall 9.8%, or about another £202m, to see the market drop to £1.86bn.
This mean a total of £388m is set to drain out of the newspaper print ad market in the next two years, according to Group M's projections.
Regional newspapers are set to bear the brunt of that print ad decline, according to Group M, shedding £217m by the end of 2014 to fall below £1bn for the first time.
The decline in regional ad spend will be 9.6% this year, a £104m fall in ad spend, and a further 11.6%, £113m, next year to be worth £865m.
Adam Smith, futures director at Group M, praised UK titles for moving quickly to develop digital revenue streams but said that online income is falling well short of making up for print ad decline.
"UK print brands are active digital innovators, but we estimate this currently retrieves at best a quarter of the ad investment departing their physical formats," said Smith. "Part of the problem is perhaps press circulations parachuting rather than plummeting; part perhaps tablet growth not being as explosive as the internet was."
The national newspaper ad market will lose £170m in ad spend over the next two years, to be worth £1bn by the end of 2014. There will be a 7% decline, or £81m, this year and 8.2%, or £89m, next year.
UK digital ad spend is expected to continue to grow by 11.6% to £5.9bn this year. And in 2014 digital will leap by 10.6% to £6.5bn, according to Group M.
"This is because digital media is huge [in the UK], and clustered in London, bolstered by UK consumers' love of online shopping and mobiles," said Smith.
Smith pointed out that British are the biggest online shoppers in the world, with the highest per capita spend of about £1,700 per internet user.
And mobile ad spend has grown from 5% of total UK digital sector just two years ago, and 10% in 2012, to a projected 15% this year.
Following a 1% decline last year, TV ad spend is expected to grow by 2.6% to £3.54bn in 2013.
One factor Group M points out is a "noisy summer" with major ad campaigns from BSkyB and BT battling it out to lure pay-TV consumers.
ITV is expected to be a major beneficiary of this marketing war, with TV ad revenues at the broadcaster's flagship channel forecast to be up 4% to almost £1.3bn for 2013.
Radio, which experienced a big boost from the Euro 2012 football contest with ad spend up 2.7%, will bump back to earth with a tough comparative this year, with 0.1% growth to £373m.
The 3.3% forecast growth in the total UK ad economy this year is extremely healthy compared with the average 4% fall across countries in the Eurozone.
"The main story in my view is that the UK ad economy is a cause for optimism," said Smith. "Almost uniquely in western Europe we have a sustained and coherent recovery in demand for advertising."
By comparison the German ad market, the largest in Europe, is set to shrink by 1% this year, France will be down 4%, while Italy, Spain and Portugal will all suffer double-digit declines.
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Almost £400m in print advertising is forecast to be lost from the UK newspaper market by the end of 2014, with digital revenues only able to make up about 25% of this decline, according to a new report by Group M.
Group M, WPP's worldwide media buying operation, said that the total UK ad market is looking to be in relatively rude health this year, underpinned by an increase of more than £1bn of digital ad investment by the end of 2014.
The UK ad economy is expected to grow 3.3% this year to £13bn, underpinned by the huge appetite for digital media spend which will increase by £1.24bn by the end of 2014.
However, Group M forecasts that UK press ad spend "remains under the most pressure" of all advertising sectors in the UK.
The total UK newspaper market is projected to shrink by 8.2% this year, or £186m, to £2.06bn.
This is an improvement over the decline of 10.2% in national and regional newspaper advertising in 2012.
However, early Group M estimates for 2014 show that this improvement is fleeting, and not a sign that the decline in the newspaper print ad market is abating.
In 2014, total newspaper print advertising is expected to fall 9.8%, or about another £202m, to see the market drop to £1.86bn.
This mean a total of £388m is set to drain out of the newspaper print ad market in the next two years, according to Group M's projections.
Regional newspapers are set to bear the brunt of that print ad decline, according to Group M, shedding £217m by the end of 2014 to fall below £1bn for the first time.
The decline in regional ad spend will be 9.6% this year, a £104m fall in ad spend, and a further 11.6%, £113m, next year to be worth £865m.
Adam Smith, futures director at Group M, praised UK titles for moving quickly to develop digital revenue streams but said that online income is falling well short of making up for print ad decline.
"UK print brands are active digital innovators, but we estimate this currently retrieves at best a quarter of the ad investment departing their physical formats," said Smith. "Part of the problem is perhaps press circulations parachuting rather than plummeting; part perhaps tablet growth not being as explosive as the internet was."
The national newspaper ad market will lose £170m in ad spend over the next two years, to be worth £1bn by the end of 2014. There will be a 7% decline, or £81m, this year and 8.2%, or £89m, next year.
UK digital ad spend is expected to continue to grow by 11.6% to £5.9bn this year. And in 2014 digital will leap by 10.6% to £6.5bn, according to Group M.
"This is because digital media is huge [in the UK], and clustered in London, bolstered by UK consumers' love of online shopping and mobiles," said Smith.
Smith pointed out that British are the biggest online shoppers in the world, with the highest per capita spend of about £1,700 per internet user.
And mobile ad spend has grown from 5% of total UK digital sector just two years ago, and 10% in 2012, to a projected 15% this year.
Following a 1% decline last year, TV ad spend is expected to grow by 2.6% to £3.54bn in 2013.
One factor Group M points out is a "noisy summer" with major ad campaigns from BSkyB and BT battling it out to lure pay-TV consumers.
ITV is expected to be a major beneficiary of this marketing war, with TV ad revenues at the broadcaster's flagship channel forecast to be up 4% to almost £1.3bn for 2013.
Radio, which experienced a big boost from the Euro 2012 football contest with ad spend up 2.7%, will bump back to earth with a tough comparative this year, with 0.1% growth to £373m.
The 3.3% forecast growth in the total UK ad economy this year is extremely healthy compared with the average 4% fall across countries in the Eurozone.
"The main story in my view is that the UK ad economy is a cause for optimism," said Smith. "Almost uniquely in western Europe we have a sustained and coherent recovery in demand for advertising."
By comparison the German ad market, the largest in Europe, is set to shrink by 1% this year, France will be down 4%, while Italy, Spain and Portugal will all suffer double-digit declines.
• To contact the MediaGuardian news desk email media@guardian.co.uk or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. If you are writing a comment for publication, please mark clearly "for publication".
• To get the latest media news to your desktop or mobile, follow MediaGuardian on Twitter and Facebook Reported by guardian.co.uk 11 hours ago.