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KPMG Media

UK media sector growth 'weakened' in Q4 as cost concerns impacted budgets


By Rebecca Stewart, Trends Editor

April 18, 2016 | 3 min read

Business activity in the UK media sector noted a marked slowdown in the final quarter of 2015, according to KPMG Media Tracker research.

The report reveals that although the industry recorded its fastest year of growth since 2007 last year, the last three months of the year saw recovery slown – noting the weakest quarterly figure since Q1 in 2013.

The UK Media Tracker Index considers trends in media sector business activity and UK marketing executives’ adspend budgets and is designed to provide a single-figure snapshot of overall industry condidtions. Any figure above 50 represents expansion, and KPMG found that the sector posted an average index of 52.5 in 2015, marking a third successive calendar year of growth and the longest sustained period of improvement since the 2007/08 global financial crisis.

This growth, however, declined Q4 of 2015 as the headline index fell to 51.9. Survey respondents suggested that "heightened economic uncertainty" was a key factor that dampened overall growth in this period.

It would appear that soft ad spend is having an effect on media owners; just over 18 per cent of UK marketing executives surveyed reported a rise in their media ad spend budgets during this time, while around 15 per cent noted a reduction. In the same quarter in 2014, 21 per cent reported a rise and only 12 per cent experienced a fall, with respondents suggesting that "increasing cost consciousness" at the turn of the year, as well as uncertainty about the UK economic outlook, had spiked ad spend budgets.

David Elms, head of media at KPMG, said: “Trading conditions for media businesses improved over the past year, and companies reported their fastest year of growth since 2007. However, growing uncertainty dampened growth towards the end of last year.

“Ad budgets are reflective of market confidence and the general consumer appetite that underpins the economy. There was a marked slowdown in growth momentum for ad spend that suggests marketing activities are being reigned in as belts tighten again and fears over future economic turbulence return.”

KPMG Media

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