Group M upgrades 2010 ad growth forecast

Sir Martin Sorrell's Group M has almost doubled its growth forecast for the UK advertising market this year to almost 8%, primarily thanks to a £100m surge in national newspaper revenues. Group M, WPP's combined media buying operation, said it expects national newspaper advertising to grow by 6.6% year on year for 2010 to £1.4bn. This represents an additional £100m compared with Group M's forecast in June of a fall of close to 2% year on year . Group M tentatively puts 2011 growth in national newspaper advertising at 2%. Group M said that national newspapers have made an "excellent" recovery in 2010 and admitted that a prediction of strong spending by retailers dying off after the World Cup in June and July had been wrong. Retail, the biggest spending category, is up 14.4% in the first 10 months of the year, while third-ranked entertainment and media is up 14%. Overall Group M said that display advertising, which accounts for about 85% of total national newspaper ad spend, will be up 9% this year. In June it predicted display advertising would be flat. For the regional newspaper industry, Group M has slightly upgraded its June forecast of an ad revenue fall of 7% this year to a drop of 5.3%. Next year is pencilled in for a 4.2% fall for the regional sector. Group M's view on the UK TV market supports recent positive reports from broadcasters including ITV and UTV Media, which holds the Northern Ireland ITV franchise , with revenue forecast to be up about 14% this year. In June Group M predicted an 11.6% rise this year. TV advertising for 2011 is forecast to be up 4%. "TV's broad-based recovery has drawn in all categories except motors, which marked time on TV between January and September while diverting new money to just about every other medium," said Group M. "We revise our TV number up again to 14%, right at the top of even recent expectations." However, Group M sounded a note of caution for 2011 arguing that despite advertiser confidence "there is no reason for us to think 2011 [TV] budgets will be much up or down from here". "Growth in 2011 will be harder to come by and our media forecast remains in the 3% to 4% range [for total UK advertising]," the media buyer said. "Our best hope for ad growth is the willingness and ability of UK plc to invest ahead of recovery. This cannot compensate for a lack of full-throated consumer recovery, but if marketers elect to advertise, it would be enough to keep media investment growing in 2011 even if the economy grinds to another halt." • To contact the MediaGuardian news desk email [email protected] 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".