Little Excitement Forecast For Q1 Agency Results
As many advertising and marketing companies get set to announce their quarter one results over the next few weeks, a new report out from Merrill Lynch says it does not expect them to turn many heads.
The advertising market was one of the worst hit by the economic decline of the past few years, but towards the end of 2003 things looked like they were turning around. Many will be waiting in anticipation for these results to see if the 2003 pick-up can carry the same momentum into 2004.
Merrill Lynch is quick to acknowledge that the advertising sector has recently had a more positive tone, but thinks spending is still not particularly rampant.
Analysts believe that US domestic trends are much better than those overseas. In Europe, things have stabilised but there has been very little growth. Also, traditional advertising in regions, other than the US, have been outpaced by non-advertising businesses such as direct marketing.
A move towards large global marketing holding companies is being favoured by clients, says Merrill Lynch. They are looking for their accounts to be managed and coordinated on a pan-regional scale with growth being a focus rather than cost cutting.
Whilst many advertisers look forward to this year’s US presidential elections and the Olympics, Merrill believes that the agencies will not benefit from these events in the same way. Consequently, agency growth over 2004 is expected to be more steady and carry on in to 2005.
Earlier this week WPP chief executive, Sir Martin Sorrell, provided further evidence of an end to the advertising downturn by announcing that the group’s financial results for the first quarter of this year are ‘quite lively’ (see Sorrell Upbeat On Prospect Of Advertising Recovery).
Merrill Lynch www.mlx.ml.com
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