Global advertising revenue will grow by 3.0% in 2003, with a reasonably strong US being dragged down by poorer markets in Europe, according to an outlook for the year from Merrill Lynch.
The broker says that the US will grow by 4.0%, as previously reported (see
Merrill Lynch Sees ‘Cautious Optimism’ For 2003 US Ad Outlook), whilst soft economies in Europe drag the non-US growth down to just 2.1%. This gives a global growth of 3.0%, contingent on the possible war with Iraq.
“The sustainability of consumer spending and speed of recovery in corporate profitability will be key to achieving our forecasts, with the prospect of a war as the major wildcard. Ad agencies are likely to lag the recovery as a pickup in creative expenditures typically lags a pick-up in media outlays, but we also expect agencies to experience better growth in the second half,” says the report.
Broadcasting Last year was a banner year for US radio, with a 5.0% growth rate in the year to date already established. Merrill expects this to continue and for the radio sector to finish the year up 5.9%.
Still in the US, Merrill forecasts that national advertising growth will continue to outpace local during the first half of the year. In H2 2003, as more difficult comparables come into play, national will slow. The full year is expected to show 5.3% growth.
In Europe, a UK broadcast recovery appears to be underway after a stronger H2 2002, say analysts. However, ITV audience losses may restrict 2003 revenue growth to around 0.5%. UK radio has so far shown few signs of benefiting from any recovery, with little change in sentiment seen by Merrill Lynch.
