London: The media industry has been given a much-needed boost, with forecasts for the growth of advertising this year revised upwards and a flurry of companies in the past two weeks reporting an improvement in revenues.

After two moribund years, there is evidence that the sector is growing again across print, television, online and billboards.

Among the firms reporting, News Corporation said advertising at its British newspapers, The Times, Sunday Times and The Sun had shown a 10 per cent improvement in the first three months of the year compared with 2009, prompting chairman and chief executive Rupert Murdoch to admit even he had been taken aback by the gains.

"There have been many weeks when the London Sun has had all-time records in revenue," he said at the results presentation. "I've got to tell you, I'm surprised, but it is very welcome."

The Advertising Association, which tracks advertising spend with research group Warc, has lifted its 2010 forecast from 0.4 per cent growth to 2.3 per cent. It had previously not expected a return to growth in the UK until the third quarter this year.

Evidence

Suzy Young, data editor at Warc, said there is now "clear evidence that the industry has seen the worst of the recession. Structural challenges, particularly with print media, remain and the recovery is fragile but the prospects for 2010 look considerably brighter."

ITV capped a strong couple of weeks for the media industry on Friday, when it reported an 8 per cent increase in TV advertising revenues during its first quarter. Time Warner had earlier reported its biggest revenue gains in two years, including a 9 per cent increase in advertising revenue from the networks division, which houses HBO and Turner Broadcasting, and a 5 per cent gain in advertising from magazines business Time Incorporated.

Pearson, the publishing group that owns the Financial Times, has reported a 7 per cent increase in revenues in the first quarter, helped by "volatile" but growing ad revenue at its newspaper operation.

At the News Corporation presentation, Murdoch said: "We're seeing pretty optimistic and expanded advertising budgets from big advertisers. When the money will drop, whether it'll be the first fiscal quarter or the second, I wouldn't be inclined to bet. But there's a lot of money out there on the boards and our advertising people are pretty."

The Bellwether Report, produced by the Institute of Practitioners in Advertising, also recently reported that marketing budgets had increased during the first three months of 2010, for the first time in nine quarters. Chris Williamson, chief economist at Markit, which compiles the IPA report, said companies were beginning to spend money building their brands again. "The main driver of advertising is company profits and a lot of firms during the recession have pared back their operating costs and are very lean, so that as business improves, that is feeding straight through to the bottom line and they are starting to spend on marketing again." According to the Advertising Association data, the market in the UK suffered a 4.2 per cent decline in 2008 and an even steeper 12 per cent drop last year.

ITV added a dose of realism when it noted that the improved performance in the first three months were against a very weak comparable period in 2009. The World Cup could also distort the figures ITV is expecting its second quarter advertising revenues to be up 22 per cent because of the tournament.

The Advertising Association says that print advertising was hardest hit last year, down 23 per cent. Recruitment advertising fell 42 per cent year-on-year with regional newspapers particularly badly hit.