The latest European Advertising Business Climate Index, produced by the European Association of Communications Agencies (EACA) trade organisation and based on monthly data collected from advertising and market research companies for the European Commission, stood at +5, down from +16 in the second quarter.
EACA attributed the decline to changes in the global economy as a result of China's economic slowdown, geopolitical tensions in Europe and neighbouring countries, as well as the implications of the refugee crisis on the EU Single Market.
The UK was the country that experienced the greatest swing in sentiment, moving from +28.6 to -10.7 over the three months to the end of September; it is now among the bottom three in Europe as regards business confidence in advertising and marketing, the other two being Greece (-25) and France (-8).
Spain also registered a significant drop, from +31 to +11, but remained in positive territory. Confidence was highest in Germany (+31), Lithuania (+27) and Romania (+24).
Demand for advertising services decreased from +14 to +5 between July and October 2015, with the downward trend also reflected in demand expectations which fell from +21 for the third quarter to +10 for the fourth.
And that pessimism was felt across all regions – Northern, Mediterranean, Western, and Central/Eastern. Companies from Mediterranean Europe expressed the lowest expectations for the fourth quarter, at +5 points, significantly down from +23 points for the third quarter.
UK and Spanish advertising and market research companies were the least optimistic about the demand for their services in October scoring -12.4 and -10 respectively, in comparison to +24.9 and +57 points scored in July.
Conversely, French and German companies now have higher expectations than in July rising from -17 and +33 respectively to -1 and +46 in October.
Employment expectations, meanwhile, have dropped from +3 for the third quarter to zero for the fourth.
Data sourced from EACA; additional content by Warc staff