Aegis Chief Sees Improvement In Media Spending

Whilst Asia is also predicted to show growth – of around 2% – Europe is still lagging. The European market is forecast to turn in a 2.0% decline in advertising revenue this year. According to analysts at ABN Amro, this implies a global advertising growth of 0.7% in 2002, above the broker’s -1.4% prediction and also above the consensus -2.0%-0.0% range.

2002 Advertising Growth Forecasts
	Year On Year Growth (%)
US	1.5
Europe	-2.0
Asia	2.0
Global	0.7
Source: Aegis/ABN Amro analysis, July 2002

In May Aegis indicated that recovering confidence amongst advertisers had not yet translated into any significant recovery in media spending (see Aegis Cautious On Media Recovery, Europe Remains ‘Depressed’). However, the group is now seeing the beginnings of a pick-up in media spending, according to Flynn. The stronger than expected television upfront markets in the US have helped boost confidence in spending.

Reliable forecasts? ABN believes that Aegis is well-positioned to forecast the advertising outlook and notes that it was the first European company to warn of the downturn in the ad market early in 2001.

Aegis’ outlook is much more optimistic than that of WPP CEO Martin Sorrell, who predicts that the ad market will not show a pronounced recovery until 2004 (see WPP Issues Profits Warning In Continuing Difficult Conditions). Sorrell’s forecasts are based on the assumption that 2002 will be another year of decline, followed by a 2%-4% growth in 2003 and 5%-7% in 2004.