Panmure Gordon media analyst Alex DeGroote predicts 2013 growth for "solid" UK advertising
Interview by Stephen Lepitak
Advertising growth rates in the UK are stable and the outlook for 2013 is all about mobile, according to Panmure Gordon media analyst, Alex DeGroote.
DeGroote's says that despite a lack of big events comparable to 2012, the market is currently in a good position and should strengthen.
"Six months ago I think there was some doom, a little bit of gloom, about the outlook for 2013 - there would be no Olympics, no Jubilee, there would be no special events, but actually media companies' share prices and advertising trends in general are better than we could have hoped for," he says.
"Growth rates here in the UK are looking fairly solid. We're seeing growth in the low to mid single digits for advertising in general so far this year, but within that mobile would be growing at double digit rates and traditional media, unsurprisingly, at much lower growth rates.
"But nothing is in negative territory," he continues, "everything is growing. I would expect that ad growth for this year in the UK will low to mid single digit with mobile and newer media growing higher, traditional media growing lower."
DeGroote made the predictions when speaking at an Empty13 event; an initiative created by Bite Communications to encourage creatives and agencies to treat an year without major sporting and royal events as a blank canvas opportunity to stand out. Events at Empty13 will include debating technological and behavioural trends, something DeGroote says agencies must respond to.
"What you're seeing is mass penetration of mobile devices from across all the providers, which is probably beyond what anybody could have expected," he explains.
"Advertisers are having to respond. Advertisers in general, the big corporates, have been sitting on cash, sitting on their hands for a long time but they realise this is a big shift in consumer behaviour.
"They need to respond so they're engaging their agencies and it doesn't matter that there are no special events, it's more about responding to the technology and the opportunity which is now available to communicate with advertisers."
From an agency perspective, DeGroote says the focus must be on embracing digital correctly and realising that traditional ways of doing business have to updated or risk losing relevance to the market.
"I think the big challenge is, quite frankly, getting digital right, getting the right people in place and charging the clients the right amount of money," he says.
"Sometimes the guys who would have driven the old client relationships don't quite get what drives the new client relationships. Equally, business development which may have relied on a certain way of doing things may not be so relevant anymore.
"Getting that personnel mix is a very sensitive issue, it's very difficult, but agencies are all about people so getting the people in place is key, as is incentivising them so that you don't lost them to the other big trend, startups."
Before his role at stockbrokers Panmure Gordon, DeGroote worked for WPP, Trinity Mirror, Rightmove, Creston and Next15 and he is a regular broadcast contributor for Bloomberg, CNBC and the BBC.
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