ZenithOptimedia forecasts no growth in global adspend in 2009

“The credit crisis has slowed the advance of some developing markets, particularly in Asia Pacific and Central & Eastern Europe,” according to the report.

ZenithOptimedia has reduced its forecasts for ad spend growth in 2009 from 5.2% to 3.2% in Asia Pacific and from 12.7% to just 1.5% in Central & Eastern Europe.

This is mainly due to fears about the economic stability of markets like Hungary, Turkey and Ukraine, according to the report, though forecasts in other developing markets remain healthy.

Latin America is still expected to grow by 14.9% and the rest of the world will experience 11.2% growth in 2009 – Big emerging markets (BRIC) are also forecast continued growth, including Russia, China, India and Brazil.

However, ZenithOptimedia has reduced its overall forecast for ad spend growth in 2009 from 4.0% to -0.2% due to the recent financial crisis, which began in Q3 2008 and accelerated in Q4.

“The fallout from the financial crisis has spread throughout the real economies of the developed world. Consumer and corporate confidence has been severely shaken, and the economic outlook is uncertain,” the report said.

ZenithOptimedia now expects ad expenditure to decline 5.7% in North America in 2009 and 1.0% in Western Europe, which is well down from its previous forecasts that was published just two months ago.

In October, ZenithOptimedia lowered its 2009 global ad spend forecast from 6% to 4% – with growth forecasts for 2008 and 2009 cut by half in North America and Western Europe (see ZenithOptimedia Lowers Global Adspend Forecast).

However, the recent report said: “The global ad market will be very tough in Q1 2009, and Q2 is unlikely to be much better. But we expect mild recovery to begin in Q3, a year after the start of the downturn, and pick up in Q4 when the year-on-year comparatives will start to get a lot easier.”

ZenithOptimedia also made some positive forecasts, predicting that over the course of 2010 global ad spend will grow 5.5%, followed by 5.8% growth in 2011.

“We estimate developing markets will contribute 89% of all ad expenditure growth between 2008 and 2011, and increase their share of the global ad market from 30% to 36% over this period,” the report added.

In terms of individual mediums, online seems to of reaped the benefits of the overall downturn – “Internet advertising continues to grow rapidly as advertisers turn to it for its innovation and accountability,” said ZenithOptimedia.

The report predicts that online ad spend will grow by 18% in 2009, including 18% growth in North America and 12% in Western Europe.

Online advertising is also expected to take a 15.6% share of global ad spend in 2011, according to ZentithOptimedia.

“The other media we expect to undergo substantial growth in 2009 are cinema and outdoor,” said the report. “Television is also doing relatively well in the downturn.”

ZenithOptimedia’s global ad spend report comes as a Chicago-based rating agency, Fitch Ratings indicates, predicts that next year the advertising environment will be the weakest it’s been since the 2001 downturn, which was the worst ad recession since 1970.

Categories under the most pressure will include automotive, financial services, airlines, hotels and car rentals, according to Fitch.

“While the 2001 ad downturn had its greatest impact on national advertising, this time around, both local and national advertising will be negatively affected,” said Fitch.

Last week, GroupM forecast that UK ad spend will decline by nearly 6% year on year in 2009, the worst of any developed country (see UK ad spend to fall nearly 6% in 2009).