‘Digital ad spend to overtake newspapers this year’

MEDIA agency Carat, which has a major operation in Manchester, believes spending on digital advertising will overtake newspapers this year – a year earlier than expected.

It says the proliferation of the internet will make digital advertising the second largest medium in terms of ad spend behind TV.

Carat has also revised down its forecasts for global advertising spend. It predicts growth of 5% this year, down from 6%, and 5.3% next year, down from 5.8%.

In the UK Carat, which owns the former MediaVest and Feather Brooksbank businesses in Manchester, predicts growth of 2.8%, down from 4% this year. Next year it forecasts 2.8% growth, rather than 3.4%.

Jerry Buhlmann, chief executive of Carat’s parent Aegis Group, said: “Carat’s latest ad spend forecasts show the continuation of two fundamental trends which have changed the advertising industry.  

“Firstly, digital media continues to grow materially ahead of all the other media and has overtaken newspapers – a year earlier than expected – to become the second largest medium in terms of advertising spend, behind TV.

“In parallel to this, the trend of the two-speed world continues, with the rates of growth in the emerging economies remaining well ahead of the US and Western Europe.”

In half-year figures Aegis said pre-tax profits rose 20% to £69.4m on group revenue of £596.8m, up 15%. It is currently being acquired by Japanese group Dentsu.