The latest forecasts for UK ad spend from WARC and the Advertising Association seem to offer a chink of light for publishers. Newspaper ad spend is expected to return to growth in 2015, rising one percent to £1.42 billion, and magazine ad spend should at least stop falling that year as well.
So good times are just around the corner, right? Everything’s going to be OK?
Well, if you look back at WARC’s previous forecasts, the picture looks a little less rosy.
For a start, the predicted one percent growth in 2015 is signficantly less than WARC was predicting only six months ago, and the same is true for magazines. In April, WARC predicting newspaper ad spend growth of 1.8 percent and magazine growth of 0.6 percent. Those figures have now dropped to 1 percent for newspapers and just 0.2 percent for magazines.
As 2015 has got closer, and the organisation has collected more data from affiliates and the industry, its forecasts have become less and less optimistic.
And it’s not hard to see why the organisation has downgraded its predictions for 2014 when you look at how its forecasts for the current year have changed. Back in April, newspaper revenues for 2014 were expected to fall by just 0.2 percent compared to 2013, but WARC now expects them to be down 2.8 percent.
And while predictions for magazine spend got slightly more optimistic between April and June, WARC is predicting a fall of 3.3 percent this year compared to its prediction of 2.2. percent in April.
The revisions between April and October look pretty damning. WARC’s data suggests national newspaper ad revenue will fall 14 times faster this year than it predicted it would six months ago, and will grow much slower next year than they thought. Considering we’re still six months away from the start of the 2015 financial year, those continued downward revisions make it distinctly likely that predicted 2015 growth will have dwindled to nothing by 2015.
And there’s an even more worrisome trend present in WARC’s figures, and it’s about digital. Those downward revisions aren’t just about print hurting more than expected, they’re also about digital growth slowing faster than expected.
Sure, digital ad spend is still growing fast, and it’s even expected to grow more next year than this year. But WARC is still becoming less optimistic as time goes on. For instance, back in April WARC expected digital ad spend on national newspapers to grow 24.6 percent this year, but now it expects it to grow 15.4 percent. That’s still a high rate of growth, but it’s a hell of a lot less than WARC were expecting just six motnths ago. And of course, that rate of growth needs to be high, when digital still accounts for just £184 million out of the newspaper industry’s total £1.45 billion revenues.
And the big picture is still worrying. Even if that one percent growth forecast for 2015 holds true for the next 18 months, ad spending on national newspapers will still be more than £20 million less than it was in 2013.
These are, of course, just forecasts. That’s why they have been revised repeatedly. But the information WARC has collected between April and now has led it to be signficantly less optimistic about ad spending on national newspapers and magazines both this year and next.
Anyone holding out for the beginning of a wholesale turnaround in ad spending on newspapers and magazines in 2015 looks set to have their hopes dashed.
Image via Flickr courtesy of dan.m86 used under a Creative Commons licence.