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Ultimately, the UK will rely on the internet for most of its media and marketing growth, and traditional media will underperform in relation to the economy in the long term – unless it becomes more productive – according to the just-issued “This Year Next Year UK,” the latest in media and marketing forecasts from WPP’s GroupM.

Productivity is dependent on being accountable, which means that traditional media can either adopt the internet’s approach (and reason for success, at least in part) or ignore it at its own peril, according to GroupM. 

Highlights of GroupM’s forecast for UK marketing and media in 2007:

  • UK measured media revenue will recover 4% this year, reaching 13 billion pounds (more than $26 billion).
  • UK Marketing services are expected to grow – 1%, reaching 13 billion pounds.
  • Total UK marketing and media will reach 25 billion pounds in 2007 – up 2.6% from 2006.
  • That total is expected to reach 27 billion pounds next year, or a growth of 3.1%.
  • Demand for TV and print advertising is stabilizing after a big drop in 2006.
  • Internet ad revenue will grow at a slightly slower “warp” speed of 34% in 2007, compared with 2006’s 48% growth.
  • There is substantial hidden growth in unmeasured marketing services (e.g., events, public relations).

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Among GroupM UK forecast data, by selected medium:

  • Television:
    • Multichannel will for the first time have an absolute majority of the 16-34 commercial audience in 2007 – 54%, up from 49% in 2006.
    • The transfer of audience from the few main channels to the many digital ones tends to reduce overall cost for advertisers, so it is contributing to TV’s revenue stagnation.
  • Internet:
    • Growth in 2008 will “slow” to 30%, compared with the 34% anticipated for 2007.
    • The internet is bigger than we think, because the measurement industry doesn’t even attempt to measure all site, or all advertiser investment in creating content and websites, or the cost of analyzing the metrics that the internet produces.
    • Social networking is taking up more of the daily average hours online, and because it’s harder to advertiser there… there’s a bit of a slowdown in internet marketing.
  • Radio:
    • 2007 forecast is 0% growth, and 1% growth for 2008.
    • Less regulated than TV, radio is more adventurous with sponsorship and promotion (S&P), which is its main source of growth.
  • Public relations: 2007 forecast is 0% growth, and 1% growth for 2008.
  • Direct marketing: a 2% decline in 2007; 0% growth in 2008.
  • Associative marketing/sponsorship: 28% growth in 2007; 3% growth in 2008.
  • Market Research: 3% growth for both 2007 and 2008.

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