Optimedia Optimistic Over 2005 Adspend Forecast

11 October 2004

The latest adspend forecast from London-headquartered global media network ZenithOptimedia radiates confidence that worldwide advertising expenditure is set to surge in 2005.

Revising upward its mid-year forecast of 5.7% global growth, ZO now predicts that advertising expansion will hit an annual rate of 6.2%. It bases this estimate on the global advertising-to-GDP ratio, up from 0.98% in June to 0.99% at the end of September.

Europe, forecasts the agency, will grow at a faster rate than the US next year – unsurprising given the continent's underperformance in 2003 compared with North America. The report covers fifty-seven nations worldwide.

It foresees US adspend growth of 4.2% with Europe eclipsing this with 4.4%. The European ad-GDP ratio has recovered to 0.8% from its 2003 low of 0.78%, sufficient to sustain stable pre-dotcom boom ratios in the UK and France. The recovery in Germany and Italy will also be strong.

Comments ZO's knowledge management manager Jonathan Barnard: "The growth comes partly from the quadrennial effect, the Olympics in some countries, Euro 2004 and the US presidential elections, and this was taken to account. But we are also recovering from the recession that began in 2001, with adspend now recovering to a percentage of GDP that is normal."

Broad-based demand for traditional advertising in retail, automotive, telecoms, financial services and other sectors is driving the recovery. ZO also believes that marketers' concern about lack of consumer confidence might actually spur additional adspend, especially in the US auto sector.

Data sourced from BrandRepublic (UK); additional content by WARC staff