Europe To See Advertising Market Pick Up In 2005

The European advertising market will remain ‘less vibrant’ this year but can expect to see greater signs of recovery during 2005, according to the latest forecasts from investment managers Merrill Lynch.

The Merrill Lynch quarter one industry report says that advertising and marketing services in Europe can expect to see greater pick up in 2005 when compared to results for the rest of this year.

In comparison, US advertising expenditure growth is expected to look worse in 2005 when compared to 2004. This is due to the tough comparisons being created by this year’s presidential elections and the Olympics.

Over the next twelve months Merrill Lynch expects improved operating margins and organic revenue growth from the large advertising agencies.

Most of the advertising companies tracked by Merrill Lynch produced organic growth during the first quarter of 2004. The investment bank expects the advertising agencies with incentive compensation arrangements to further benefit, resulting in top line growth and margins later this year.

During quarter one, US advertising business, along with direct marketing and public relations, saw improvements with most large agencies posting a jump in revenue. Asia and Latin America have also been sources of growth over the last quarter but in Europe, advertising results have been more mixed and less vibrant, says Merrill Lynch.

Merrill Lynch: www.mlx.ml.com

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