Advertising Outlook And Background From Merrill Lynch
Advertisers are likely to be wary of increasing their spend going into an uncertain 2003, according to Merrill Lynch media analyst Neil Blackley. This will probably result in the recovery next year being ‘somewhat muted’, he said in a media investment report.
Ad chiefs need to be confident that consumers are going to go out and buy their products and services if there are to commit budgets to new marketing campaigns. A weakening economy is therefore not attractive ground on which to boost spend.
This situation could mute any upturn that is experienced in 2003. This effect has already been predicted by WPP chairman, Sir Martin Sorrell, who has argued that a pronounced recovery is not likely until 2004 (see WPP Issues Profits Warning In Continuing Difficult Conditions).
Forecasts Merrill Lynch forecasts that global expenditure will fall by 1.2% for the full year 2002. The US will lead the way in terms of growth. In the longer term, when the economy really recovers, analysts believe that advertising will return to its historical growth pattern of outperforming GDP growth.
The global ad market The US is the largest advertising market in the world, with a 46% share of the world’s $456.1 billion spend; the UK takes 4.8%. Of this, television takes the lion’s share at 38.5%, followed by newspapers at 32.4%, as shown.
Europe In Europe, the UK takes the majority share (17.9%) of the $23.7 billion advertising market, followed closely by Germany at 17.0%.