Barclays predicts tough 2012 for ad growth

Barclays Capital claims that 2012 will be a “low growth environment” for advertising agencies. Barclays forecasts that agency organic revenue growth will average 2.9% next year – down from the 5.6% it expects agencies to record in 2011.

The predictions are based on combined average organic growth for the agencies at the major holding companies, including WPP, Omnicom, Aegis and Publicis Groupe.

Despite forecasting a tough 2012, Barclays believes that agencies are in a good position. “Overall, we believe that the agencies have become more valuable in an increasingly fragmented and complicated world and that the tailwinds from digital and emerging markets offer structural growth in an environment where cyclical growth may be hard to come by,” the investment firm stated.

Barclays forecasts total US ad spend growth of  1.4% and 4.0% in 2011 and 2012 respectively, which is below the firm’s estimates for US nominal GDP growth of 4% and 5%.

Read the full MediaPost article here.