Barclays forecasts lower Global Ad Spend growth

Barclays has lowered its global ad spending forecasts for this year and next, it confirmed in a report to investors last week. The new forecasts are lower than those coming from the major media agency groups (see latest MediaTel Ad Forecasts Executive Report).

Barclays believes global spending will reach nearly $490 billion this year, up 3.5%, a downgrade from its January growth forecast of 4%; and then 4% next year, a half percentage point lower than it had forecast earlier.

In April, Barclays upgraded its U.S. growth forecast for 2012 to 4.6%, up more than a half percentage point from its January forecast, while spending growth next year was upgraded to 2.3% from 1.6%. For now, those forecasts remain unchanged.

Barclays picked up on another oft-quoted “Sorrellism” – that dollars spent on the internet still significantly lag consumers’ time spent online. In the U.S., for example, online usage accounts for about 36% of all media consumption time. The share of advertising spend allocated to online is currently nearer 16%.

Barclays concludes that “advertising will continue to underperform global GDP for the foreseeable future.”