World Advertising Forecasts From Zenith Optimedia

The full figures from Zenith’s report are included here. They show that Europe is currently lagging behind other world regions in the advertising recovery, whilst the Asia Pacific leads the way. The USA, by far the largest ad market, is looking stronger towards the end of 2002 and going into 2003.

World advertising expenditure summary, $USm current prices
	2001	2002	2003	2004	2005
North America	146,734	148,777	151,651	157,076	162,138
USA	141,636	143,469	146,134	151,391	156,323
Canada	5,099	5,308	5,517	5,685	5,815
Europe	72,907	72,109	73,885	77,275	80,821
Asia-Pacific	63,537	64,280	66,942	69,838	73,162
Latin America	19,167	16,899	17,659	18,973	20,289
Rest of world	8,692	9,634	10,579	11,700	12,575
Major media total	311,037	311,699	320,716	334,863	348,985
Source: Zenith Optimedia, December 2002

World Advertising Growth Forecasts
	2002 v 2001		2003 v 2002		2004 v 2003		2005 v 2004
	Current	Constant	Current	Constant	Current	Constant	Current	Constant
North America	1.4	-0.2	1.9	-0.1	3.6	2.3	3.2	1.9
USA	1.3	-0.3	1.9	-0.1	3.6	2.4	3.3	1.9
Canada	4.1	1.8	3.9	1.6	3.1	0.7	2.3	0.0
Europe	-1.1	-3.2	2.5	0.5	4.6	2.5	4.6	2.4
Asia-Pacific	1.2	1.1	4.1	3.9	4.3	4.0	4.8	4.3
Latin America	-11.8	–	4.5	–	7.4	–	6.9	–
Rest of world	10.8	–	9.8	–	10.6	–	7.5	–
Major media total	0.2	-0.7	2.9	1.0	4.4	2.8	4.2	2.6
Source: Zenith Optimedia, December 2002

“Relative to the retreat elsewhere in the developed world, the USA had a banner year in 2002 with ad budgets practically maintained at 2001 levels in real terms. During the course of the year we have added $2.6 billion to our estimate of 2002. The congressional election was a big contributor to this adjustment, having been predicted at around $700 million and actually generating about $1 billion, the largest campaign spend so far. This augurs well for the presidential election in 2004,” says Zenith.

The report claims that the influence of US advertising sentiment on the rest of the world is greater than ever. The States will account for 44% of spend in 2002, making the region a great force in determining the health of the advertising industry on a global scale.

Slow burn recovery Zenith says that previous advertising recovery has often arrived with unexpected energy, but its numbers show that this remains unlikely in 2003.

“The muted macroeconomic background certainly does not warrant irrational exuberance. We assume world economic growth at 2.8% in 2003 against 2.6% in 2002, and that consumer spending growth will actually decelerate from 2.7% to 2.6%,” says the report.

However, it claims that the bottom has now been reached, given that there have been no material downward revisions to Zenith’s forecasts of the major markets for six months or more – not even in Germany, where general economic sentiment has deteriorated heavily since the September election.