Advertising trends appear to be a bit weaker than expected, says a new report from investment bank, Merrill Lynch.
According to the latest US marketing and services update, conditions in this sector are however improving, despite growth being slower than anticipated when compared to the solid improvements in gross domestic product (GDP).
Analyst, Lauren Rich Fine, said: “We maintain the view that advertising is still a vibrant field and believe that creativity is improving rather than worsening.”
However, demand for advertising doesn’t look set to improve much in the near future, with companies such as Unilever and Colgate saying that increased marketing is constraining their earnings performance.
For quarter three, Merrill Lynch predicts that newspaper companies will continue to post decent advertising revenue growth around 4.5-5%, with expectations for quarter four 2004 and the beginning of 2005 set at a similar level.
Latest global advertising expenditure forecasts from Carat, the world’s largest independent media agency network, has said that ‘solid recovery’ in Europe and the US has led to an increase in expectations over the next two years. In 2004 worldwide spending is now forecast to increase by 5.7% and in 2005 by 5.0% (see Carat Revises 2004 & 2005 Adspend Forecasts Upwards).
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