Media&Marketing Emmet OliverWith the merchants of doom getting it spectacularly wrong in 2004, people in the media and advertising industries are prepared to be a little more upbeat about prospects for 2005.

Unlike 2003 when there were high-profile closures like the Dublin Daily and Dohertys Advertising, 2004 has been a year of steady growth with most sectors benefiting from greater levels of consumer spending.

Some of the consolidation in 2003 has probably helped to make this year a lot more secure for most media and advertising companies. Signs of a strong market are to be found everywhere. The largest recipient of television revenue, RTÉ, expects to report a strong surplus for the year and is now able finally to turn its attention to digital television.

Most of the major advertising agencies are reporting strong figures, although pressure continues to be applied to media buying agencies. Margins in this area are traditionally narrow but, as more and more deals are awarded to large internationally aligned agencies, the margins are becoming dangerously thin.

This could force some of the smaller media-buying agencies to the wall, but mergers and consolidation are more likely, possibly starting with the largest Irish agency, McConnells.

Its media buying arm, MCM Communications, has no international links.

With the Department of Finance predicting growth of about 5 per cent for 2005, most media businesses hope to match that in their own sectors.

GT Media, one of the largest Irish-owned media-buying outlets, is going one step further and predicting an 10.8 per cent growth in advertising revenue in the Republic next year. This compares with the 4.8 per cent predicted for the rest of the world

"In Ireland we predict that the total investment in advertising will reach €1.18 billion in 2005. There is, however, great potential for further growth in the years ahead as Ireland still lags behind other European countries in advertising spend per capita," said Mr Graham Taylor, the chief executive of the firm.

His colleague, Mr Liam Pender, said he expected television to outperform the market.

"Access to this medium is increasing with the growth in the number of stations and a consequent decrease in entry costs. In addition, lower production costs are making it more cost effective for advertisers to consider television as an option."

He was a little more sanguine about the press sector.

"A continued boom in the retail, property and recruitment sectors will be needed if national press is to continue to grow its revenue base.

And while new magazine arrivals have brightened the market, it is likely that national newspapers will continue to get the lion's share of advertisers' investments."

He said growth in the overall radio market would be driven by RTÉ's rate increases for 2005, which had been set at 6 per cent for the year.

Like many other observers, he said outdoor had the most difficult year of all the main media in 2004, reporting lower than average growth. He said new research might help to boost the sector next year.

Media owners are also upbeat at this stage. Mr Willie O'Reilly, managing director of Today FM, told The Irish Times, 2005 would be a buoyant year. "With a predicted 80,000 housing starts, the economy is in good shape," he said.

He said radio offered value for money with 89 per cent of the public listening to it each day.

"New entrants to radio advertising, like Harvey Norman, have demonstrated a real belief in its effectiveness and are waking up others to its possibilities," he suggested.

Mr Gary Power, who now heads up advertising agency Saor Communications, said that next year total media expenditure would be up by between 5 and 7 per cent.

He said rate cards were up across the sector, with broadcasters, in particular, feeling the pinch from new BCI regulations on children's advertising.

"The print market has introduced about 4 per cent increases across the board and radio stations are up in some cases by 10 per cent.

Cinema sold well during this year and should see a two or three point increase.

The biggest increase will be seen in online campaigns, which have gained strongly in the European marketplace."

Alternatives, the Dublin-based marketing agency, said there would be huge demand in 2005 for marketers in areas like telecoms and financial services, where market share could be eroded very quickly.

One of the agency's predictions will have a certain authentic ring for many in the industry. "There will be some upward pressure on salaries as candidates face hefty mortgages and inflation."

Sky's plans

James Murdoch, chief executive of BSkyB and son of one Keith Rupert Murdoch, was in Dublin last week talking to advertising agencies at a specially arranged event.

Advertisers who have spoken to The Irish Times said they were generally impressed by his presentation.

Mr Murdoch and his team confirmed that Sky would be rolling out further Irish advertising opt-out stations early in 2005.

Their overall aim for the Irish market, Mr Murdoch said, was to be the largest pay-TV provider.

By 2006 the company hopes to introduce high definition television in an attempt to take on RTÉ and TV3. The company also refused to rule out buying further Irish programming rights.

The company's appetite for buying high profile rights was highlighted this week when it won the broadcasting rights to air live all English cricket for the next four years at a cost of €320 million sterling.

NewsTalk106 deal

Accountants Horwath Bastow Charleton are renewing their sponsorship of business programming on NewsTalk106. This is the second year the two companies have signed a deal. The value of the sponsorship deal was not disclosed. The firm will sponsor business bulletins which form part of various shows on the station.

Emmet Oliver can be contacted at eoliver@irish-times.ie