European Growth Fuels 2004 Global Adspend
Independent media communications specialist, Carat, has today released revised advertising growth forecasts for 2004, saying that continued recovery in the European markets has helped fuel global adspend ahead of previous expectations, up 6% year on year.
Looking to 2005, the agency group forecasts global advertising expenditure to grow by 4.9%, as advertisers’ show few signs of cutting media budgets. This prediction is broadly in line with Carat’s September forecast of 5.0% growth. However, Carat cautions that while the market is currently healthy, the price of oil, the weakness of the dollar and the US current account deficit could be causes for concern as the year progresses.
From a regional perspective, US adspend for 2004 was up 5.8 %, with a growth of 4.5% predicted for 2005; indicating a steady 2005 despite a lack of political advertisement spending and the effects of the sports championships seen in 2004.
Asia Pacific is forecast to be up 6.2% for 2004, with 2005 growth at 5.8%, confirming the robust growth previously predicted for this region.
Elsewhere, European adspend is forecast to rise by 4.8% in 2004, with a growth of 4.4% expected for 2005. Within Europe, the UK is estimated to increase by 6.4%, an upwards revision of the 4.6% predicted in September; pointing towards a surprisingly strong 2004. Carat’s forecast for advertising expenditure in 2005 has also been raised, up from 4.3% to 4.6%.
Germany looks set to end 2004 with a -1% decrease in adspend, although the outlook for 2005 looks brighter, up 1.3%. In France, advertising expenditure is up 3% for 2004 and is forecast to be up 2.2% in 2005. Italy should see adspend exceed expectations in 2004, up 6.5% compared to previous estimates of 5.7%. Spain also did well in 2004 with adspend estimated at 5% and predicted to drop to 4.5% for 2005.
Overall, the global recovery looks solid and the world economy is expected to achieve over 4% GDP growth in 2004. While economic growth slowed in the second half of 2004, advertising remained largely unaffected and the growth rates are now back to the pre-recessional levels of 1999.
Commenting on today’s forecasts, Doug Flynn, chief executive officer of Aegis Group PLC, Carat’s parent company said: “2004 ended with a better than expected 6% growth in global adspend helped by the continued recovery in the European markets. the one-off impact of the Quadrennial Effect – additional spend generated by major spots amid political events, provided a fillip to global adspend in 2004 and we see 2004 growth settling at 4.9% with advertisers’ confidence stable and the market looking firm.”
| 2005 Advertising Forecast | ||
| % Growth | ||
| 2004 | 2005 | |
| Global | 6 | 4.9 |
| USA | 5.8 | 4.5 |
| Asia Pacific | 6.2 | 5.8 |
| Europe | 4.8 | 4.4 |
| UK | 6.4 | 4.6 |
| Germany | -1 | 1.3 |
| France | 3 | 2.2 |
| Italy | 6.5 | 3.3 |
| Spain | 5 | 4.5 |
| Source: Carat, January 2005 | ||