Consumer ad recovery is coming along nicely - Press Gazette

Consumer ad recovery is coming along nicely

Goldman Sachs is predicting good things for ITV.

The broadcaster’s ad revenues should rise by 10% during 2010, say Goldman’s analysts.

By the end of 2010, this will push ITV’s net advertising revenues up to £1.42bn. This is within spitting distance of what the company achieved on the eve of recession in 2007 (£1.49bn). On top of that, we can expect a further 6% increase during 2011.

Game over? Not quite. ITV still has big problems, including a ridiculously underdeveloped online business, which brought in £24m last year. Archie Norman, the company’s new chairman, is keen to emphasise that ITV’s ad revenue base is still ‘below where it was in 1999″.

But let’s be grateful for small mercies. VAT’s return to 17.5% in January hasn’t dented advertising investment (perhaps it simply encouraged more expenditure).

Encouragingly, ITV’s success is being replicated elsewhere. In late March, Associated Newspapers reported an 8% YOY rise in underlying ad revenues for Q110.

The Sun, we’re told, experienced a 50% leap in ad revenues from supermarkets and DIY retailers during the Easter holidays.

In the consumer-focused ad markets, you can set your watch by following the movements of Procter & Gamble, the world’s largest advertiser.

The company fired the starting gun on recession in Q208, slashing its US ad expenditure by 20% YOY. Now we learn that P&G is planning to boost its 2010 UK advertising budget by more than the rate of sales growth.

Quite how fast the company’s sales are growing remains a subject for speculation. Almost certainly, sales aren’t growing as fast as unit volumes. These, we’re told, are rising by a ‘high single-digit’percentage YOY. Meanwhile, quite naturally, P&G is talking about extracting ‘efficiencies’from media owners.

Yet the news looks good and it’s getting better. Hopefully, the rising rate of investment in advertising will generate the kind of returns that encourage marketers come back for more, even in the face of rising public sector unemployment later this year.



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