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Global ad spending to fall 7%, Publicis unit says

Declines in global advertising will be much worse than expected, says a leading media buyer, which will on Tuesday unveil the grimmest forecasts yet seen for the advertising market and traditional media companies.

Worldwide advertising spending, a barometer for economic confidence, will fall 6.9 per cent in 2009 to $453bn, compared with 1 per cent growth last year, predicts ZenithOptimedia, the media buying unit of Publicis, the world’s fourth-largest advertising group.

The forecasts outstrip rivals’ figures released last month. Group M, owned by WPP, expects a 4.4 per cent decline this year and Carat, owned by Aegis, expects a 5.8 per cent drop.

The outlook is gloomiest for newspapers. Spending is projected to fall 12 per cent. Radio and magazines are also grappling with double-digit declines.

Television is expected to perform relatively well, with ad spending down 5.5 per cent, due to its vastly reduced prices, marketers’ familiarity with the medium and evidence that consumers are also watching more television, rather than going out.

In contrast, the internet’s share of advertising continues to grow, reaching a projected 12.1 per cent of overall spending.

In December, Zenith had expected advertising spending to decline 0.2 per cent. Since then the economic crisis has spread to emerging markets, said Jonathan Barnard, head of publications at the agency.

“A lot of markets we were expecting to show at least modest growth this year are clearly going to be down substantially,” he told the Financial Times.

Mr Barnard said the latest revisions reflected “reality crashing in” on advertisers. China and India continue to show “substantial promise”, he added. But central and eastern Europe, where ad spending had previously been expected to grow 1.5 per cent this year, is now forecast to fall 13.9 per cent. Hungary, Turkey, Ukraine and Russia will all see “substantial declines”, Mr Barnard said.

Latin America, while forecast to fall 2 per cent, is the most resilient area of the world, with the Brazilian market up 7 per cent excluding currency effects. Among the more developed markets, North America will suffer the most, losing 8.3 per cent of its value this year. Western Europe, down 6.7 per cent as a whole, will see the UK and Spain suffer the greatest falls, Zenith said.

Mr Barnard expects the global advertising market to resume modest growth in 2010 in most markets except North America.

Источник: Financial Times

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