French Plan Likely To Reduce Supply Of TV Ad Time, Accelerate The Internet

TV still is the world's dominant medium, and it remains No. 1 in every major advertising market - so far. But that is expected to change starting this year, when at least one major agency forecaster - GroupM's Adam Smith - predicts the Internet will overtake television as the dominant ad medium in Sweden. Smith predicts the U.K. will be next in 2009, and if some recent developments in France are any indication, its neighbor across the Channel won't be far behind.

The French media marketplace is bracing for a government plan to take advertising off the nation's state-owned TV channels, a move that could slow overall advertising growth in the marketplace at a time when many in the industry are concerned about a potential recession - or stagflation - in the advertising economy. At the very least, the move is expected to erode TV's share of ad spending in France, and is likely to accelerate the Internet's.

The plan unveiled by French President Nicolas Sarkozy has had a negative effect on the shares of the nation's two agency holding companies - Publicis Groupe and Havas - whose stock are trading at or near recent lows.

French advertising trade association Union des Annonceurs has estimated that the plan could reduce the supply of TV advertising inventory in the market by 25%, which would also push the price of TV CPMs up in the market, driving some advertisers to shift their budgets into other, more efficient media, especially the Internet.

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