Global ad spend to decline in 2009
Global ad spend is expected to continue to decline throughout 2009, according to forecasts from major agency networks over the last month.
ZenithOptimedia predicted a 0.2% overall decline in global adspend next year, though it expects Asia Pacific and Central & Eastern Europe to grow but at a slower rate.
Developing markets will largely counterbalance the decline in North America and Western Europe’s ad spend next year, which is likely to fall by 5.7% and 1% respectively, according to ZenithOptimedia’s report.
“The credit crisis has slowed the advance of some developing markets, particularly in Asia Pacific and Central & Eastern Europe,” the report said.
GroupM also forecasts that global ad spend in measured media will drop 0.2% to around $458 billion in 2009, compared to the previous year when spending was up by 2.6%.
Ad spend in the US will decline by 3% to $157 billion in 2009, following a small 0.3% increase in 2008, according to GroupM.
Adam Smith, GroupM futures director, said: “Advertisers are scrutinising every penny. The automotive and financial services categories have obviously seen weakness across 2008, and retail will be under pressure as we move beyond its busiest fourth quarter into 2009.”
Earlier this month, Magna said it now expects US advertising to fall by 4.5% next year, while Jack Myers forecasts a greater loss of 6.7%.
According to the media economist, more than $25 billion in advertising revenues will be drained from media companies between January 2008 and December 2010.
Myers predicts that total US marketing communication budgets will decline by a staggering $56 billion during the same period.
“It’s not just economic,” Myers said in an interview with Dow Jones Newswires. “It’s secular and systemic. It’s like moving from an agrarian economy to an industrial economy. Anyone connected with the advertising business is challenged right now.”
A number of industry representatives have also predicted a similar bleak outlook for the UK in 2009.
GroupM forecast that UK ad spend will decline by 6% year on year in 2009, which is its worst prediction for any developed country, while ZenithOptimedia warns of a 3.1% fall in the UK next year.
However, Magna expects to UK to report a 0.1% increase in ad spend this year and next year and ZenithOptimedia is positive about online growth, which it predicts will see a significant 16.8% increase next year despite the current economic climate.
ZenithOptimedia: www.zenithoptimedia.com GroupM: /www.groupm.com Magna: www.magnainsights.com Jack Myers: www.jackmyers.com