WPP: Television Broadcasters Face “Severe Pressure” in Online Shift

Authored by Jay Baage on May 29, 2007 - 11:52am.

London, U.K. - Sir Martin Sorrell, head of WPP, the world’s second-biggest advertising company, says that television broadcasters in the UK are facing “severe pressure” as advertisers abandon traditional media in favor of the internet. The industry guru’s warning came shortly after ITV had reported a 9.6 per cent decline in advertising revenue. Last week, SMG, the Scottish media group, told shareholders to expect a 7 per cent slide in television advertising revenues.

Sorrell told The Times online that the quickening pace at which advertisers are switching their budgets to online has created a “fundamental shift” in advertising that would change irreversibly the way in which broadcasters such as ITV and Channel 4 make money. Sir Martin said that revenues from online activity at WPP, whose UK-based agencies include MindShare and Ogilvy & Mather, would increase from 25 per cent of total revenues to a third in the next five years.

Official figures released last week showed that spending on online advertising in the UK increased by 47.5 per cent to more than £2 billion last year, while total advertising spending stayed about the same, according to The Times Online.

Related Links:
TV under pressure in online shift, says Sorrell (The Times Online UK)
http://www.wpp.com/wpp/