Forecasts for 2001 US adspend continue to be cut, with analysts at Zenith Media and Merrill Lynch slashing previous predictions in light of continued economic gloom.

John Perriss, chairman and chief executive of Zenith in London, lowered his December estimate for major global media adspend in 2001 from 6% to a mere 1.4%.

“The US, Western Europe and Japan could all go into recession at the same time. As a result, we don’t see the third quarter and the fourth quarter with any kind of uplift the way we did six months ago,” commented Perriss. “Until corporate profitability improves, we’re bumping along the bottom.”

This will be particularly acute in the US, with American adspend in the main media – TV, newspapers, radio, magazines, outdoor and the internet – set to fall 2% year-on-year, the first annual decline since 1991 predicted Perriss. Behind the figures lie the soft market for TV advertising and the cuts in adspend by major US firms.

Merrill Lynch analyst Lauren Fine was less pessimistic, forecasting that 2001 US adspend will fall 0.7% compared with last year. However, this is still lower than Universal McCann guru Robert J Coen’s recent prediction of 2.5% growth [WAMN: 15-Jun-01], and is well down on Fine’s previous estimates of 4%–4.5% uplift (made last year) and 2.5% (March).

Both analysts predict a much stronger year in 2002, with Fine predicting 5.1% growth in the US and Perriss erring again on the side of caution at 4.5% for the main ad outlets (6.5% worldwide).

“The major media – newspapers, magazines, TV – will all be up less than 5%,” continued Fine, with more robust growth in “radio, direct marketing and the internet” pulling up the average.

News source: New York Times