Merrill Lynch has lowered its global ad forecast to 0.4% growth this year, with a fall of 1.6% expected in 2009.
The financial services firm previously forecast growth of 1.9% and 1.2% in 2008 and 2009 respectively.
Merrill Lynch has also lowered its US advertising forecast, with a fall of 4.2% expected this year and a drop of 5% predicted for 2009, compared with its previous forecast of a 1.6% fall in 2008 and dip of 2.1% in 2009.
Next year is going to be tough, said Merrill Lynch, with limited visibility into ad budgets and significant uncertainty in the market.
However, it added that agencies are better positioned than traditional media given their diversity across disciplines and geographies, an increasing focus on faster growing and more measurable marketing services, a compensation structure that is now largely based on costs v commissions, and flexibility in their cost structures.
A forecast from Magna earlier this week predicted that total worldwide advertising is expected to rise by just 0.5% to $642.8 billion this year, with the UK forecast to see 0.1% growth this year and next (see Worldwide advertising to grow 0.5% this year).
Magna now expects US advertising in 2008 to decline 3.2% to $270.8 billion, with a fall of 4.5% expected next year.
GroupM, however, forecasts a 0.2% fall in global advertising spend, to $458 billion, in 2009 compared to the previous year when spending was up 2.6% (see Ofcom Plans New Public Service Channel To Rival BBC).
The projected decline is the first retreat in global advertising since the 3% fall recorded in 2001 after 2000’s dotcom-driven ad growth of 15%.
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