Zenith Optimedia Group, co-owned by Publicis Groupe of France and UK-headquartered Cordiant Communications, has issued its latest global adspend forecast – seen by the Wall Street Journal, as “one of the most comprehensive” in the ad industry.
Overall, predicts Zenith, this year’s 5.8% dive will be trailed in 2002 by a gentler 1.3% rate of decline, but neither percentage compares well with the 1991-92 recession when adspend slowed respectively by 3% and 1%. Adspend trends are seen as a bellwether of the economy as a whole – in general advertising leads the latter both on the downward and recovery curves.
Says Zenith Optimedia head of publications Adam Smith: “We're not expecting any action until the fourth quarter of next year, but the good news is that the numbers have stopped tumbling and the odds of the downturn accelerating are very low … [a trend] consistent across sixty countries.” The study ignores internet spending as “negligible” in terms of the advertising market as a whole.
As might be expected within the world’s largest economy, the chill will be felt most keenly in the US where two further years of decline in terms of constant prices can be expected. A slide of 8.7% is forecast for 2001, 3.5% next year and 0.3% in 2003. Full year recovery is unlikely before 2004.
The report also acknowledges the adverse impact on the industry of the atrocities of September 11. On a more upbeat note, however, Smith points to the latest economic forecasts which suggest that consumer confidence and/or business confidence will move upward.
The Stateside downturn has stabilized, Zenith believes. During the period January-July, America’s top ten advertisers from General Motors, Philip Morris and DaimlerChrysler downward spent in aggregate nearly 9% less on advertising year-on-year. However, this decline peaked in May when it started to edge slowly into reverse.
US magazines and newspapers have fared worst. Magazine advertising is predicted to decline by 10% in this year and 6% next, while newspapers could be down 6% in 2001 and 4% in 2002.
In Europe the worst hit media sector is newspapers which, Zenith estimates, will experience a fall in advertising income of 6.9% in constant inflation-adjusted prices. This compares with a predicted fall of 4.9% fall in TV revenues while magazine ads will suffer least, losing 1.6% of income.
In 2002, newspaper advertising will slip a further 0.8%, and magazines by 1%, while TV ads should recover by a marginal 0.3% in 2002. The gloom should lift in 2003 with all three sectors becoming positive, respectively by: 0.5%, 1% and 3.1%.
News source: Wall Street Journal