ZenithOptimedia slashes TV ad revenue prediction.

Lack of consumer confidence and no major sporting event to blame, agency says.

TV ad revenue is set to grow by just 1.5 per cent in the UK this year, according to ZenithOptimedia's latest forecast.

The agency downgraded its earlier prediction of 5.2 per cent growth for 2005 after a woeful second quarter, which saw TV ad revenues decline by 6 per cent.

ZenithOptimedia blamed the downturn on the lack of a major sporting event, and the fall in retail sales and declining consumer confidence. It said it expects TV revenues to grow by 4.3 per cent in 2006 because of the football World Cup and a predicted revival.

However, it warned the internet and cinema were growing far more strongly.

Adam Smith, the head of knowledge management at ZenithOptimedia, said: 'Ringtones were the only salvation. All TV is really doing is growing at the rate of the display market.'

Total TV ad revenue is set to hit pounds 3.4 billion this year, rising to pounds 3.6 billion in 2006 and pounds 4.2 billion by 2010. The report highlights the need for ITV to grow revenues from its multi-channel offering. It predicts ad revenue for ITV1 will fall by 4.9 per cent this year to pounds 1.6 billion and will drop to pounds 1.5 billion by 2010, with Channel 4 and multichannel expected to be the main beneficiaries.