SYDNEY: Australia's advertising market is set to share the suffering of consumers and the financial markets, with Citigroup and Deutsche Bank both forecasting a slowdown in marketing spend, with traditional media first in the firing line.

Deutsche Bank predicts that total adspend will fall by 1.0% in 2008 – compared with the 1.6% growth rate forecast earlier this year – with traditional media posting a drop of some 3.5%.

On the plus side, national advertising is holding up well on radio and TV, and the internet and pay TV are expected to grow by 10.2% this year.

However, areas like Western Australia and Queensland are seeing economic growth slow, and newspapers are also set to face a challenging period in cities like Sydney and Melbourne. 

Andrew Anagnostellis, an analyst at Sydney-based Deutsche Bank, warns: "Given the deteriorating and highly uncertain macro environment, there is a real possibility that the outcome for advertising could be much worse than anticipated."

"It appears that the advertising categories in newspapers directly exposed to the consumer, such as employment classifieds advertising, are among the weakest," he added.

Citigroup also argues that traditional media advertising will decline by 3.8% in 2009, stating that "advertising is yet to reach a cyclical low during the current earnings recession."

Data sourced from Sydney Morning Herald; additional content by WARC staff