Global Media Recovery Will Come Slowly

Advertising growth will remain ‘muted’ for the next few years and will not show a great return to strength by the end of 2002, as some industry observers have hoped. This is the opinion of media analysts at ABN Amro, who in a report released at the end of last week, state that consumer and corporate spending will assume greater in importance than advertising for the media sector in the coming years.

In 2002, global advertising is expected to decline by 1.4%, with a recovery emerging in Q3. However, analysts say that the bounce-back will not be strong, as advertising tends to be ‘early in, late out’ of a recession.

Drawing on evidence from the recessionary period in the early 1990s, ABN forecasts that it will take at least four years from now for the ad market to recovery from its downturn.

Last year was the worst for advertising in 50 years, with global adspend estimated by ABN to have fallen by 5.7%. The decline in telecoms, media and technology (TMT) and finance advertising is thought to have been a major factor in the overall retraction of the advertising market.

The first half of 2002 is forecast to show a global ad revenue decline of 6.5%, whilst H2 grows by 3.7%. In 2003, ABN says it expects another ‘below-trend’ year, before the market returns to normal rates of growth of 5-5.5% in 2004 and beyond.

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