The global media market will pick up next year, but don’t expect another boom for half a decade.
That’s the latest forecast from WPP Group chairman Sir Martin Sorrell, whose pessimism in such matters is notorious [and is often viewed as a case of underpromising before overachieving].
Speaking before the World Association of Newspapers in Dublin, Sorrell pointed to next year’s Olympic games, European soccer championships and US presidential elections as key drivers of an advertising recovery.
Such factors will bring to a close three turbulent years Sorrell likened to the Depression. “You would have to go to the 1920s to find a bull market similar to the 90s, and we all know what happened in 1930,” he remarked.
Despite a recovery in 2004, Sorrell does not expect the media market to enjoy exceptional growth for several years. “If you are waiting for a boom year, stand by for 2008,” he continued, pointing to that year’s Olympics and US elections.
Turning his attention to WPP, Sorrell declared that the war in Iraq’s effect on the agency giant had been “minimal”, revealing that advertising had stayed “remarkably constant”. WPP, he continued, will pursue growth in the future by strengthening its assets outside America and western Europe.
Sorrell’s predictions of a mild recovery over the next few years tally with a new report from PricewaterhouseCoopers.
In a survey of fourteen global media and entertainment sectors, PwC forecasts a rise in the value of the total media industry from $1.1 trillion (€0.9 trillion; £0.7 trillion) in 2002 to $1.4 trillion in 2007, representing average annual growth of 4.8%. Adspend will rise 4.1% per year, climbing from $308bn to $375bn, with TV and radio increasing their share of the total at the expense of print.
PwC believes TV networks, cable and satellite TV, and online access and advertising will be the major media growth areas in the next few years.
However, the study suggests conditions are already improving in the US, with ad revenues there expected to rise 3% this year to $153bn – almost double the 1.6% growth rate of 2002.
Data sourced from: multiple sources; additional content by WARC staff