Ad Revenues Lag Behind Economic Upturn
Zenith Media
As predicted, Zenith Media has downgraded its advertising forecasts for 2002 as the ad recovery lags behind the economic upturn.
Zenith says that advertising expenditure is still shrinking in the world’s leading economies but sees signs of an upturn in Q4 2002. A return to stronger growth is forecast in 2003.
According to Zenith, the top seven advertising markets shrank by 5.4% in 2001, compared to December estimates from Zenith which anticipated a decline of 4.7%. Despite a return in consumer confidence, Zenith forecasts that advertisers will only start spending when earnings improve and thus predict that ad expenditure in the top seven markets will shrink by 1.9% in 2002.
As with the previous recession, Zenith believes that advertising will be harder hit than the economy at large and will take longer to recover.
Following the worst-ever year for UK television in 2001, Zenith now expects to see a return to growth in TV revenue in May; “partly because dotcom is washing out of the year-on-year comparison, and partly because telecommunications and finance spending is growing.”
Radio is forecast to achieve year-on-year growth in June and outdoor some time in Q3. National newspapers and consumer magazines will follow in Q4 although regional newspapers and business magazines, says Zenith, are likely to continue to decline well into 2003 largely due to their greater reliance on the classified market.
Merrill Lynch
According to its latest forecasts, Merrill Lynch believes that advertising revenue will continue to decline in 2002, lagging behind the economic recovery by some 3-6 months.
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