NewsLine Feature: Global Ad Forecasts From ZenithOptimedia
The latest global advertising forecasts from ZenithOptimedia offer a mixed prognosis for the industry with regional variances providing cause for consideration. The media services agency continues to predict full-year growth of 2.9% in current currency and 1.0% in constant currencies.
Worldwide ad expenditure for 2002 came in at $315.3 billion, representing an improvement over 2001 of 0.9% in current prices but a 0.2% fall in constant prices. These figures were slightly ahead of December’s forecasts with Europe, in particular, performing better than anticipated.
However, the European recovery has since been put on hold and North America is expected to outperform other western markets in 2003. The figures support the notion that real growth will not be forthcoming in major countries until 2004.
With global economic growth not predicted to exceed 3% in the next few years, there is little impetus for an advertising boom and the recovery has been hindered by events in the Middle East and the Sars virus.
The protracted build-up to hostilities did at least ensure that the industry was prepared for the war in Iraq and could make contingency plans. Sars was different in that it arrived with less warning and had a dire effect on Far Eastern markets and tourism. However, the situation is now under control and as the world’s fastest growing economic area, North Asia is set to witness a boost in advertising spending.
For the main part, US advertising was able to ride the storm in the first half of 2003. Strong TV upfronts have increased the confidence of marketers and the general outlook is promising. Zenith believes that adspend will increase by 2.7% (in current terms) this year and with the Olympics and a presidential election to come in 2004, there is scope for further growth, despite the uncertain state of the economy.
“USA advertising is performing more strongly than the expectations of underlying economic performance would normally merit. Leading advertisers are the motor driving growth evenly across all media. This is high-quality momentum,” says the report.
Europe continues to underperform and any revival has been put off until 2004. The eurozone, which includes Germany, France, Spain and Italy, is exposed as the slowest growing economic grouping in the developed world and the advertising market is contracting in real terms for the third year in a row. The UK is faring no better and with consumer demand on the slide, there is little prospect for strong growth in the remainder of 2003. A slow-burning recovery is more likely with Zenith predicting a 3.2% rise in revenues next year.
UK television companies have been looking for signs of an upsurge in the first half of 2003 but this latest study offers little in the way of encouragement with no knock-on effect from the other side of the Atlantic.
“The TV market is notably uninfected by US upfront enthusiasm having endured the worst share loss of any medium since 1999, with no prospect of restoring its real revenue within this forecast,” says Zenith.
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