Carat Revises 2005 Ad Growth Forecast Downward

07 January 2005

Carat, the global media planning and buying network owned by Aegis Group, is doing a Sorrell.

Sir Martin of that ilk is famed for his cautious (and usually justified) view of the ad industry's fortunes. Like the WPP knight, Carat is concerned about the extent of the US recovery and its inevitable knock-on effect on the global economy.

On Wednesday Carat cut its earlier (September) forecast for 2005 adspend growth stateside, reducing this from 4.8% to 4.5%. The network also lowered its global forecast from 5% to 4.9%.

It justified its pessimism, seemingly perverse in the face of a "solid" global adspend recovery, by referring to "potential causes for concern". Among these were the volatility of oil prices, weakness of the US dollar and the nation's massive current account deficit.

But Carat admitted it had no indication of advertisers significantly cutting down on media investment, adding that American "advertising budgets continue to rise".

Carat's crystal ball contradicts those of rival media shops ZenithOptimedia and Universal McCann, both of which revised their forecasts upward last month [WAMN: 06-Dec-04].

Data sourced from Financial Times Online; additional content by WARC staff