Brexit shadow lingers over Irish ad market, says Core Media
Advertising group saw turnover rise 15% last year, but weak sterling has derailed growth
Core Media chief executive Alan Cox: “It is very unusual in the economic cycle for advertising not to be tracking growth.”
Operating profit at Core Media rose 37 per cent to almost €3.1 million in 2016, but an “unusual” 2017 means the advertising group’s billings are likely to be flat this year.
The group, which is the largest buyer of advertising in Ireland, had turnover of €222 million in 2016, up 15 per cent on the year before, according to accounts for Core Media Communications SJRQ Limited filed to the Companies Office. Net profits increased 66 per cent to €2.2 million.
Core Media chief executive Alan Cox said 2016 was a “a good year” for the group, but this year would be “flat” in terms of billings. “Brexit is the main factor,” he said.
The Irish ad market as a whole is on track to be down as a result of a poor first half in which UK-based advertisers were more cautious about their spending, while the value of their budgets in the Irish market was hurt by sterling’s weakness.
“Considering the fact that the economy is growing by 5 per cent, it is very unusual in the economic cycle for advertising not to be tracking growth,” Mr Cox said.
The trend won’t continue indefinitely, he added. “It’s understandable how it has happened this year, but I think it will correct itself.”
Core’s main activity is the planning and purchasing of advertising across digital, television, radio and print on behalf of its clients, which include AIB, Musgrave, the National Lottery and Heineken, while it has also expanded into newer areas such as data science.
The group now employs almost 300 people, up from an average of 238 during 2016, which was in turn was up from 192 the year before. Its chairman is Greencore chief executive Patrick Coveney, while French advertising giant Publicis has a minority stake. The company counts Mediavest, Zenith Optimedia, Publicis Engage, Livewire, Radical Media and Ignite Research among its subsidiaries.
The rise in profits in 2016 coincided with the third consecutive year of growth in the Irish advertising market, with Core estimating that the market increased to €886 million, up 3.7 per cent. This rate of market growth was lower than had been expected at the start of 2016, while growth of 3.3 per cent had been pencilled in at the beginning of this year.