The Advertising Association/Warc Expenditure Report Executive Summary of adspend survey data for Q1 2011 and forecasts to Q1 2013 www.warc.com

Summary – Overall UK picture Outlook We have revised down our adspend forecasts for 2011 and now expect growth of around 1.4% this year (at current prices), rather than 2.9% previously predicted. This equates to a drop in spend of 2.9% at constant 2005 prices. This is a reflection of the gloomier economic outlook following a series of more pessimistic GDP forecasts. Household disposable income is expected to be much lower this year and consumer confidence remains weak The forecast for adspend growth in 2012 remains broadly unchanged at 5.4%. The economy is expected to improve and the London Olympics could provide a welcome boost We have dropped expectations for all media bar internet which is expected to gain additional ad revenue this year (7.2% growth vs 5.8% predicted in March). TV and out of home (both predicted to increase 2.5%) have had growth downgraded but will still perform ahead of trend Source: Advertising Association/Warc Expenditure Report, www.warc.com/expenditurereport

Summary – The UK Media Mix In Q1 2011, adspend rose by 1.7%, just over half the figure predicted at the start of the year. Strong performances from online (+7.2%) and TV (+9.4%) helped offset the drops in spend across press and radio Additionally, adspend in Q2 2011 is expected to have been virtually flat this year, due in part to a relatively strong result for Q2 2010. It should slowly improve up to the middle of next year, with national newspapers, out of home, cinema and internet increasing share of spend Display advertising increased 3.1% in the first quarter of the year, with TV gaining 2.1pp compared with the same period 12 months ago Over the same period classified (including search) dropped 1.5%, although internet still increased its share by 3.5pp, mostly at the expense of the regional press Source: Advertising Association/Warc Expenditure Report, www.warc.com/expenditurereport

Summary – The UK Advertising Mix Total display spend for 2011 has been revised down to 1.9% growth for the year (from an earlier 3.6%). Next year should see stronger growth of 5.5% Total classified adspend will grow marginally in 2011 at around 0.2%. This is expected to rise to growth of just over 5% in 2012 Recruitment advertising is expected to experience another sharp drop in 2011 (–15.5%) on the back of a volatile labour market. However, the decline should halt in 2012 as job creation picks up Non-recruitment classified should increase spend throughout the forecast period, with anticipated gains of 2.5% this year and 5.8% next year Source: Advertising Association/Warc Expenditure Report, www.warc.com/expenditurereport

Total UK adspend annual % change (at constant prices) Adspend increased 4.6% year on year in 2010 (at constant prices) Total UK adspend annual % change (at constant prices) % Source: Advertising Association/Warc Expenditure Report, www.warc.com/expenditurereport

Total UK adspend annual % change (at current prices) UK adspend is expected to increase throughout the forecast period, although predictions for 2011 have been lowered Total UK adspend annual % change (at current prices) % Source: Advertising Association/Warc Expenditure Report, www.warc.com/expenditurereport

Annual % change in UK adspend, Q1 2011 (at current prices) TV and internet recorded the strongest increases in spend in Q1 2011 % Annual % change in UK adspend, Q1 2011 (at current prices) Note: Press total combines all newspaper and magazine categories. Source: Advertising Association/Warc Expenditure Report, www.warc.com/expenditurereport

Annual % change in UK adspend, 12 months to March (at current prices) TV and internet showed the biggest annual increases in the 12 months to March 2011 Annual % change in UK adspend, 12 months to March (at current prices) % Note: Press total combines all newspaper and magazine categories. Source: Advertising Association/Warc Expenditure Report, www.warc.com/expenditurereport

TV, internet and direct mail all gained share in Q1 2011 Annual percentage points change in share of UK adspend, Q1 2011 Percentage points difference Note: Press total combines all newspaper and magazine categories. Source: Advertising Association/Warc Expenditure Report, www.warc.com/expenditurereport

Percentage points difference TV, internet and out of home have all gained share in the 12 months to March 2011 Annual percentage points change in share of UK adspend, 12 months to March Percentage points difference Note: Press total combines all newspaper and magazine categories. Source: Advertising Association/Warc Expenditure Report, www.warc.com/expenditurereport

The topline data included in this presentation is drawn from the Advertising Association/Warc Expenditure Report. The Expenditure Report provides detailed and authoritative advertising expenditure data for all major media. For more information and to subscribe please visit www.warc.com/expenditurereport