Carat Revises Down Global Ad Forecast
Carat has issued revised forecasts for global advertising expenditure in 2008 and 2009, with the worldwide prediction for 2008 revised downwards by just over a percentage point from 6.0% to 4.9%. 2009 is also very slightly reduced, from 4.9% growth to 4.8%.
The main driver of the reductions for 2008 is downward revisions for ad spend in four economies: the US, the UK, Spain and China.
| Year on Year % Growth At Current Prices | |||
| 2007a | 2008e | 2009e | |
| Global | 5.1 | 4.9 (6.0) | 4.8 (4.9) |
| USA | 1.3 | 2.1 (3.8) | 3.1 (2.6) |
| Canada | 9.1 | 6.1 (7.2) | 7.2 (7.7) |
| Asia Pacific | 7.4 | 8.2 (8.8) | 5.7 (7.2) |
| Japan | 0.9 | 1.5 (1.5) | 0.5 (0.5) |
| China | 15.5 | 18.2 (19.7) | 10.9 (13.2) |
| Western Europe | 4.5 | 2.2 (3.8) | 2.3 (3.6) |
| UK | 6.3 | 2.5 (4.3*) | 2.2 (4.4*) |
| Germany | 0 | 0.3 (0.5) | 0.5 (0.7) |
| France | 0.9 | 1.7 (1.8) | 2.4 (2.6) |
| Italy | 3.9 | 2.8 (3.6) | 2.4 (3.1) |
| Spain | 5.9 | -2.3 (3.8) | -0.8 (3.5) |
| Nordics | 7.5 | 4.3 (5.0) | 3.1 (4.0) |
| Central and Eastern Europe | 21.7 | 16.8 (17.9) | 15.2 (15.3) |
| Russia | 26.5 | 22.8 (22.6) | 19.5 (19.3) |
| Figures in brackets show previous forecasts, issued in Mar 2008 *change in methodology to include classifieds in press | |||
Jerry Buhlmann, CEO of Aegis Media, said: “It’s clear that the worldwide economic issues affecting businesses are having an impact on where and how advertisers spend their money. It is also significant that the US and the UK, as the highest spenders on advertising in their regions, are showing reductions in our forecasts. But overall, the picture is still one of growth.”
The UK’s overall forecast has been cut from 4.3% to 2.5%, with a downward revision of 1.8% points, while growth in the US is predicted to slow to 2.1% from Carat’s earlier forecast of 3.8%.
A report from Magna published in July forecast that worldwide advertising spending will rise 4.4% this year, with the UK predicted to see 3% growth.
Carat has revised China’s growth downwards by a percentage point for this year, with 2009 forecast to see a more significant decline in growth, with forecasts down from 13.2% to 10.9% in what will become the world’s third largest advertising market.
| Global Year on Year % Growth At Current Prices | |||
| 2007a | 2008e | 2009e | |
| TV | 5 | 5.9 | 5.5 |
| Newspapers | 0.4 | -0.8 | -0.2 |
| Magazines | 4.6 | 1.7 | 2.3 |
| Radio | 2.1 | 3.3 | 3.3 |
| Cinema | 17 | 13.2 | 13.3 |
| Outdoor | 6 | 5 | 4.6 |
| Internet | 28.8 | 23.7 | 18.6 |
TV is set to grow this year and next ahead of 2007’s performance. Similarly, cinema shows strong growth, but it comes from a very low base. Only newspapers are predicted to decline on a worldwide basis.
Spending on internet advertising continues to grow ahead of all other sectors, albeit not at the same rate as 2007, and Carat predicts that this slowdown in growth will continue through into 2009. The below chart indicates that the growth of the internet is primarily at the cost of print advertising spend, even though newspapers and magazines together still dwarf internet’s share. TV is predicted to grow its share year-on-year in both 2008 and 2009.
| Global % Share of Advertising Spend | |||
| 2007a | 2008e | 2009e | |
| TV | 40.8 | 41.2 | 41.5 |
| Newspapers | 24.5 | 23.2 | 22.1 |
| Magazines | 13.2 | 12.8 | 12.5 |
| Radio | 7.5 | 7.4 | 7.3 |
| Cinema | 0.5 | 0.6 | 0.6 |
| Outdoor | 5.9 | 5.9 | 5.9 |
| Internet | 7.3 | 8.6 | 9.8 |
In June, GroupM revised down its 2008 UK ad growth forecast to 4% from 6%, adding that – excluding internet – traditional media revenue will fall 2% this year and 2% in 2009.
Carat: 020 7430 6000 www.carat.com