The latest report from Merrill Lynch says that advertising is finally back on track and as a result the group has revised its global advertising forecast for 2004 upwards to 5.5%.
For the first time in several years, the regional forecasts for US and overseas are aligned with GDP; with US advertising expected to grow by 6.3% and overseas by 4.6%. Merrill Lynch says that the revision of the overseas figure is largely due to growth outside of Europe as advertising gains in this region are still patchy.
The global advisory company says that overseas is likely to perform as well in 2005 than in 2004 and with this is mind, the 2005 global advertising forecast has been revised to 5%. However the downward forecast, when compared to 2004, is as a result of slower than expected economic growth, which will affect the forecast of US newspaper classified advertising as well as tough comparisons being set in 2004 by the Presidential elections advertising spend.
Merrill Lynch says that it maybe possible for advertising to outperform GDP this year, given the surge expected from political and Olympic spending, however, without this extra spending traditional advertising medium would be performing weaker than in the past but the internet is likely to benefit from any marketing budget increases.
Last week, in a separate US update, Merrill Lynch revised newspaper advertising revenues up to 5.5%, up from 4.5%, while TV estimates were lowered to 4% from 8% due to a weaker upfront market and audience erosion (see US Outdoor Advertising Expected To Overtake Radio By 2005).
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