ZenithOptimedia, the media planning/buying network co-owned by Publicis Groupe and Cordiant Communications, is again in clairvoyant mode.
In a report published Monday, the shop gives the thumbs-down to European growth, pointing instead to the USA where it believes cost-cutting will boost profitability and, by extension, advertising expenditure.
Posits Zenith: “Corporate USA has resorted to the chainsaw to restore profits, and profitability underpins the confidence to advertise.” Conversely, it argues: “Regulation and culture . . . make it harder to wield chainsaws in western Europe and Japan”. [Or as those cultures might prefer to rephrase their philosophy: the interests of social justice are put before those of global investment banks.]
Zenith’s rune-readers believe adspend stateside will rise in 2003 by 2.2% – marginally ahead of the predicted 2.0% US inflation rate –whereas the average increase for western Europe will be a nominal 0.4%.
France will lead the continent’s major advertising economies, boosting adspend by 1.3%, followed by the UK with 1.1%. Spain and Italy will register increases of 0.7% and 0.6% respectively. Germany will be down by 0.9%.
In Japan, the world’s second largest advertising economy, where advertising spending fell 6.8% last year, Zenith forecasts modest growth of 0.8% in 2003 – in real terms below the nation’s 1989 level of expenditure.
And even in the US, Zenith adds a cautionary note: “Prolonged war [on Iraq] would gravely damage advertiser confidence.” However, “a swift conclusion would do the opposite,” the agency opines, pointing to an already firm market for advance sales of network television airtime. It refers in particular to the current strength in the US auto, retail, refinance and real estate advertising sectors.
Data sourced from: Financial Times; additional content by WARC staff