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Year of sluggish growth ahead

12 November 2010

Among the many exclusive surveys that Televisual publishes each year, the Commercials 30 is perhaps the best at revealing the true state of the media industry’s prospects in the months ahead.

Every year, the Commercials 30 (see full survey here) weighs up the fortunes - or otherwise - of the UK’s commercials production companies. As such it’s an excellent barometer of advertiser confidence, which in turn directly impacts on the revenues of commercial broadcasters.

And the encouraging news is that commercials producers are reporting a slight upturn in business compared to last year. The general figures are all up: the average production budget for a 30 second ad has risen from £143k to £167k; companies are working on an average of 64 jobs each year, compared to 60 last year; and the turnover of commercials production companies has risen substantially too.

Many producers say business conditions, which were tough in the first six months of the year, have eased. Some even report an ‘autumn rush of scripts.’ Advertisers, it’s clear, are spending again.

This uptick was confirmed recently by WPP boss Sir Martin Sorrell, who said the global ad giant had enjoyed its strongest quarter for 10 years as consumer goods companies and retailers started spending again.

Of course, few are predicting strong growth for the creative industries next year, despite these positive signs. Caution is the watchword, with business prospects likely to be dampened by the impact of last month's Spending Review as well as the BBC’s tough licence fee deal.

As our recent Talking Point (see here) on this subject clearly shows, the media industry is expected to avoid a double dip recession. Above all, there is a sense that business has come through the worst, but that conditions will remain tough and challenging for the forseeable future. If anything, it looks set to be a year of sluggish growth.

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