Carat Upgrades 2005 Global Adspend Forecast To 5%
Carat, part of Aegis Group plc, has slightly upgraded its 2005 global advertising expenditure forecast to 5.2%, up from the previously predicted 5%, with the increase primarily driven by growth in Asia.
Growth trends in the USA are in line with expectations, resulting in Aegis’s 2005 forecast remaining unchanged with growth at 4.5%.
In 2006, Carat expects that next year’s Football World Cup in Germany, and to a lesser extent the Winter Olympics in Italy, will boost adspend further and forecasts global growth of 5.8%.
The Asian advertising market continues to grow at an impressive rate and after three years of negative growth, Aegis claims that the Japanese advertising market is recovering. China continues to be strong, and other Asian markets are showing clear growth. Consequently, Carat expects adspend growth in China, Hong Kong, India and Indonesia to reach more than 14% this year and is predicting growth to continue.
Commenting on the forecasts, Robert Lerwill chief executive of Aegis said: “We’ve slightly raised our global forecast for the current year. Adspend growth in Asia is expected to grow strongly driven by the continued expansion of the Chinese market.”
He continued: “Adspend in the US continues to make steady progress, despite conflicting signals from different areas of the economy. In Europe, the conditions in some of the major economies suggest a slight slowing in adspend, but this is largely offset by growth in Central and Eastern Europe which is offering marketers some exciting opportunities.”
The predictions also discussed the increasing shifts in allocation of advertising budgets, with Carat revealing marketers increasingly shifting their budgets to the internet, resulting in television’s share of adspend levelling out and newspaper’s declining.
Carat claimed that spend on online advertising has outgrown radio and is predicting to see the medium catching up with outdoor during 2005.
These predictions are confirmed by new research from online magazine, Direct, who found that an increasing number of marketers are shifting their adspend onto online, with 60% planning to raise their online advertising expenditure in 2006 (see Marketers Move Adspend Online).
This summer a number of industry experts posted revisions for global advertising expenditure; ZenithOptimedia estimating an 4.7% increase this year (see McCann Revises 2005 Adspend Estimates), while Universal McCann’s Bob Coen predicted total US adspend for 2005 to be up 5.7% year on year, reaching $278.7 billion, down from his previous estimate of 6.4% (see ZenithOptimedia Cuts 2005 Adspend Forecast).
The Advertising Association (AA) and World Advertising Research Centre (WARC) forecast adspend in the UK to rise by almost 5% this year and by nearly 4% in 2006, revising their previous estimates downwards from 4.3% (see UK Adspend Forecast To Rise 5% In 2005).
| Carat Revised Forecasts For Global Adspend | |||
| 2004 (a) | 2005 (f) | 2006 (f) | |
| Global | 6.7% | 5.2% (5.0%) | 5.8% |
| USA | 5.8% | 4.5% (4.5%) | 5.0% |
| Asia Pacific | 7.4% | 6.8% (5.8%) | 7.2% |
| Japan | 5.4% | 2.5% | 3.0% |
| China | 22.0% | 18% | 20.0% |
| Europe | 5.5% | 4.2% (4.6%) | 4.8% |
| UK | 6.8% | 3.7% (4.8%) | 4.5% |
| Germany | 1.0% | 1% (1.3%) | 2.0% |
| France | 3.5% | 2% (2.2%) | 2.3% |
| Italy | 7.9% | 2.7% (3.3%) | 4.7% |
| Spain | 6.0% | 5.1% (5.0%) | 4.6% |
| Nordics | 5.8% | 4.7% | 4.0% |
| CE Europe | 17.5% | 11.4% | 10.9% |
| Carat: September 2005 | |||