Feature: Media Not Yet Out Of The Woods
Optimism may be returning to some areas of the UK media- ITV, for example, has been buoyed by rising ad revenues thanks to World Cup mania. However, the World Cup is now over and on a more global scale, recent reports suggest that advertisers are still reluctant to plan their spending too far in advance and that therefore its not quite time to start smiling yet.
In fact, at Merrill Lynch, far from seeing recovery on the way, the feeling is that for 2003 worse is to come. The analysts are looking to scale back advertising growth forecasts for 2003 from 5% to 2%-3%, due to the more subdued outlook suggested by some downbeat financial statements made by media companies recently.
This week has seen Zenith Optimedia echo the grim predictions. Here too a recovery this year is seen as a remote possibility, with worldwide expenditure expected to fall by 0.5% and by 1.7% in real terms.
On a more positive note, Zenith’s report suggests that in fact what appears to be further recession is in fact stabilisation at the level the market was at before the media and telecoms boom at the end of the last decade.
The report says: “By the end of 2002 the five big European economies will have shed 8% of their 2000 advertising in real terms. According to our forecast, they will have done well to replace 5% of this by the end of 2004, by when we hope all five will be firmly restored to real growth.”
This week’s media spending forecasts from Jack Myers are slightly more positive than Zenith’s. Myers is projecting that overall media spending for 2002 will be flat in comparison to 2001, while Zenith is expecting a decline of 1.2%. For 2003, Zenith anticipates spending growth of 1.9%, while Myers is more bullish, forecasting 3%.
A recovery, then, is on its way, but may take a while to arrive.
| Zenith Optimedia Media Forecasts (major media; newspapers, magazines, television, radio, cinema, outdoor) YoY Change (%) | |||||||||
| 2001 v 2000 | 2002 v 2001 | 2003 v 2002 | 2004 v 2003 | ||||||
| Current Prices | Constant Prices | Current Prices | Constant Prices | Current Prices | Constant Prices | Current Prices | Constant Prices | ||
| North America | -6.1 | -8.6 | -2.1 | -2.7 | 1.9 | 0.3 | 3.9 | 1.9 | |
| of which: | USA | -6.1 | -8.7 | -2.2 | -2.8 | 1.9 | 0.3 | 3.9 | 1.9 |
| Canada | -4.1 | -6.5 | 2.2 | 0.7 | 3.2 | 1.3 | 3.2 | 1.3 | |
| Europe | -3.2 | -5.7 | -0.7 | -2.7 | 2.8 | 0.7 | 4.8 | 2.7 | |
| within which: | France | -4.9 | -6.4 | -2 | -2.6 | 2.8 | 1.4 | 3.5 | 2.1 |
| Germany | -5.5 | -7.7 | -3.7 | -5 | 0.5 | -0.4 | 6 | 4.7 | |
| Italy | -3.7 | -6.3 | -0.5 | -2.3 | 3.2 | 1.7 | 4 | 2.3 | |
| Spain | -5.8 | -9 | -3.8 | -6.7 | 2.1 | -0.4 | 3.8 | 1.3 | |
| UK | -4.4 | -6.1 | -2.3 | -3.1 | 2.6 | -0.4 | 3.8 | 0.9 | |
| Asia/Pacific | -2.2 | -2.8 | 1.7 | 1.7 | 4.1 | 3.6 | 4.4 | 3.5 | |
| Asia/Pacific ex Japan | -0.2 | -2.4 | 8.1 | 7 | 7.5 | 5.7 | 8 | 6.1 | |
| Latin America | -0.5 | – | -6.9 | – | 8.2 | – | 10.1 | – | |
| Africa/Middle East/Rest of World | 4.1 | – | 8.4 | – | 9.4 | – | 11.9 | – | |
| Total | -3.8 | -6.4 | -0.5 | -2.7 | 3.2 | 1.2 | 4.9 | 2.5 | |
| Source: Zenith Optimedia, July 2002 | |||||||||
Subscribers to MediaTel Insight can access more national and international media analysis, forecasts and news. For subscription details please visit the site.