WPP's global media investment group said the UK advertising market remained healthy, but highlighted a number of issues that caused it to downgrade its forecast.
These include well-publicised brand safety concerns, following revelations that digital ads have been appearing on inappropriate sites, which has prompted "some large advertisers to pause investment on unmoderated user-generated platforms".
Advertisers are increasingly taking a "more measured view" toward digital, the report said, and consequently GroupM revised down its growth forecast in the pure-play internet category to 11%, compared with 15% in November.
GroupM defines pure-play internet as digital advertising minus elements attributable to "legacy" TV and print brands.
Another contributing factor to the more modest adpsend growth expected this year is a drop in TV investment by several of the medium's largest categories, such as food, finance, cosmetics and retail.
This prompted GroupM to reduce its TV investment forecast from flat to -3% this year. "Online advertisers are big and growing supporters of TV but are not enough to offset falling investment from TV's more traditional categories," the report said.
An ongoing challenge facing the TV advertising market is the accelerating loss of viewers aged 16 to 24, the report continued.
GroupM predicted that there will be 59bn 16-24-year-old commercial TV impressions in the UK – a 10% drop since the previous year and the lowest volume since the arrival of Sky Digital in 1998.
"We came into the year predicting zero revenue growth for TV, and now we are at -3%, a dramatic change compared to TV's outstanding performance of 10% growth in 2015," said Adam Smith, GroupM's Futures Director, who also ruled this out as a long-term trend.
"We think TV's present pressures are more cyclical, which is typical behaviour in this sector and reflects the economic cycle, rather than structural issues," he explained.
Political uncertainty – and especially Brexit, the UK's decision to leave the EU – are also reasons for GroupM to downgrade its adspend growth forecasts.
"We had previously discounted Brexit as a drag on the economy, but the recent UK General Election has magnified rather than reduced uncertainty, in contrast to political and economic stabilisation in the Eurozone," Smith said.
"This is not helpful for growth when consumers and public finances are already under stress, and corporate investment subdued," he added.
Looking ahead, GroupM's inaugural forecast for 2018 is for total UK media investment growth of 4.5%, with pure-play digital gaining two points of market share to 58%.
"Despite the challenging dynamics in economic and political arenas, our advertising forecast demonstrates the fortitude of the UK advertising market," concluded Nick Theakstone, CEO of GroupM UK.
"Sustained investment growth and advertisers' embrace of automating technologies show the optimism and confidence marketers have for reaching the UK consumer digitally."
The latest AA/WARC Expenditure Report, which provides the historical context for GroupM's forecasts, predicts the UK ad market will expand by 2.5% this year and 3.3% in 2018.
Data sourced from GroupM; additional content by WARC staff