Views mixed on Australian adspend

27 June 2011

SYDNEY: Prospects for the Australian advertising market may be worsening, according to a new forecast.

Financial services provider the Commonwealth Bank has downgraded its advertising expenditure predictions from growth of 3.1% to an expansion of 2.7% this year.

Among the main contributors to this trend are the slowing job market, a decline in the volume of press ads, soft retail spending levels and a possible increase in interest rates.

"While stronger investment spending is an upside risk to overall growth, tighter monetary policy would exacerbate the challenges facing the retail sector," Alice Bennett and Dominique d'Avrincourt, analysts at CBA, wrote in their report.

Alternative forecasts from investment banks Goldman Sachs and Credit Suisse proved markedly more optimistic, arguing the pace of acceleration will reach 4.4% and 5.1% respectively.

By contrast, Citigroup pegged this figure at 2.4%, but Aegis Media Pacific, the biggest media agency in Australia, anticipates a 6% lift in revenues.

Data sourced from The Australian; additional content by Warc staff