The global advertising recovery is slower than expected said a new report from Merrill Lynch and predicted a global advertising growth forecast of up to 5% in 2005, with Europe lagging behind both the worldwide average and the US with an expected 3% – 4% growth.
In the latest
Advertising and Marketing Services report, Merrill Lynch analysts said that by 2005, the US is expected to be up 5.5% year-on-year and if European advertising agencies were even to reach the 2004 advertising forecast target of again 3% – 4%, then slightly stronger results would have to be delivered in the second half of this year.
The report added that there is only limited potential for operational improvements at advertising giants, Aegis and Publicis but WPP is expected to deliver a stronger than expected quarter one performance when its results are released in August.
Overall, advertising is only rising roughly in line with GDP not ahead as Merrill Lynch previously predicted. Once again the analysts have reiterated that the advertising recovery does not feel typical due to the surge in spending in the US through political activity and the Olympics boost. The updates goes on to say that considering this much needed boost, individual mediums are still performing weaker than in the past.
The sale of American independent advertising group Grey Global has added some colour to this quietly recovering market says Merrill Lynch. It added that although reports suggest that WPP and Havas are now the prime contenders, WPP would be challenged to justify Grey on a strategic basis, while Havas’ challenge would be financing such a purchase (see Havas Chairman Confirms Interest In Bidding For Grey).
Related Links
