A continued advertising downturn is certainly on the cards, if a new analysis by Universal McCann’s Robert Coen is to be believed.
Coen, senior vice-president and director of forecasting at the global advertising agency, produces a review of advertising spend figures every six months. His latest offering predicts that the ad growth rate for the whole of 2001 will be just 2.5% in the US – the lowest level since the 1991 recession and well below the 5.8% he had forecast in December last year.
Global growth outside the US is expected to be 5%, down from the previous estimate of 6.5%, according to the report.
The news comes as a number of media and advertising companies are experiencing declining ad revenues, falling profits and broker downgrades. ITV’s airtime revenues have been particularly hard it, as has been borne out in figures from Carlton Communications (see Carlton Stock Dives On Indefinite Ad Downturn) and, more recently, Granada (see Continued Ad Revenue Woe At Granada, But Results Are Top End Of Predictions).
There is a fair amount of fear that whatever happens in the US may be a precursor to experiences that will be felt here in the UK. Coen’s report says that the general economic decline in the US is the major cause for the slow-up in advertising.
ABN Amro analysts believe that Coen’s figures are ‘optimistic’, given that we have witnessed a Q1 decline of 5.2% in the US and 2.0% globally. The broker predicts a 1.0% decline for the States and a growth of 3.2% for the rest of the world.
| 2001 US Adpsend Growth Forecasts |
| |
Robert Coen |
ABN Amro |
| National advertising |
2.1 |
– |
| Local advertising |
3.1 |
– |
| TV |
-0.4 |
-1.6 |
| Radio |
2.0 |
-1.4 |
| National magazines |
1.0 |
-0.7 |
| National newspapers |
1.0 |
-0.7 |
| Direct mail |
4.5 |
– |
| Internet |
10.0 |
– |
