Zenith Sees Signs Of Recovery In Ad Market
Stronger than expected activity in the US and a slight upturn in Europe has prompted ZenithOptimedia to raise its full year forecast for global advertising expenditure. However, the revision was small and the outlook is for modest growth moving into 2004.
However, despite rising confidence in the advertising industry, growth is not expected to exceed 5% next year with the major markets slowing to around 4% in 2005.
| Worldwide Advertising Expenditure By Region ($ million) | ||||
| 2002 | 2003 | 2004 | 2005 | |
| North America | 149,627 | 153,761 | 160,844 | 166,965 |
| of which: USA | 144,388 | 148,325 | 155,240 | 161,224 |
| Canada | 5,239 | 5,436 | 5,604 | 5,741 |
| Europe | 76,670 | 78,278 | 81,333 | 84,489 |
| within which: France | 9,031 | 9,128 | 9,383 | 9,664 |
| Germany | 16,973 | 17,221 | 17,690 | 18,354 |
| Italy | 7,074 | 7,043 | 7,251 | 7,510 |
| Spain | 5,083 | 5,118 | 5,324 | 5,540 |
| UK | 15,215 | 15,288 | 15,781 | 16,233 |
| Asia-Pacific | 61,934 | 64,467 | 67,570 | 71,458 |
| within which: Japan | 33,516 | 33,775 | 34,297 | 34,939 |
| Latin America | 16,085 | 16,208 | 16,750 | 17,515 |
| Rest of World | 11,169 | 12,273 | 13,641 | 15,054 |
| Major media total | 315,484 | 324,986 | 340,138 | 355,482 |
| Source: Zenith Optimedia, September 2003 | ||||
| World Advertising Growth Forecasts | ||||||||
| 2002 v 2001 | 2003 v 2002 | 2004 v 2003 | 2005 v 2004 | |||||
| Current prices | Constant prices | Current prices | Constant prices | Current prices | Constant prices | Current prices | Constant prices | |
| North America | 2.1 | 0.3 | 3.2 | 1.1 | 4.9 | 3.6 | 4.0 | 2.6 |
| of which: USA | 2.0 | 0.4 | 3.2 | 1.0 | 5.0 | 3.7 | 4.0 | 2.7 |
| Canada | 4.1 | 1.8 | 3.8 | 0.9 | 3.1 | 1.6 | 2.4 | 0.6 |
| Europe | -0.3 | -2.2 | 2.1 | -0.1 | 3.9 | 2.2 | 3.9 | 2.1 |
| of which: France | -1.4 | -3.3 | 1.1 | -0.8 | 2.8 | 1.8 | 3.0 | 1.8 |
| Germany | -4.1 | -5.3 | 1.5 | 0.8 | 2.7 | 2.8 | 3.8 | 3.5 |
| Italy | -3.5 | -5.5 | -0.4 | -3.0 | 3.0 | 1.1 | 3.6 | 1.5 |
| Spain | -1.2 | -4.1 | 0.7 | -2.4 | 4.0 | 2.0 | 4.1 | 1.8 |
| UK | 0.1 | -1.4 | 0.5 | -2.4 | 3.2 | 0.8 | 2.9 | 0.4 |
| Asia-Pacific | 1.0 | 1.0 | 4.1 | 3.6 | 4.8 | 4.2 | 5.8 | 5.0 |
| within which: Japan | -6.8 | -5.9 | 0.8 | 1.3 | 1.5 | 2.4 | 1.9 | 2.7 |
| Latin America | -12.0 | – | 0.8 | – | 3.3 | – | 4.6 | – |
| Rest of World | 18.4 | – | 9.9 | – | 11.2 | – | 10.4 | – |
| Major media total | 1.0 | -0.2 | 3.2 | 1.3 | 4.8 | 3.4 | 4.6 | 3.0 |
| Source: ZenithOptimedia, June 2003 | ||||||||
Region by region Zenith anticipated that the US economy would pick up in July and August but has still seen fit to lift its 2003 advertising growth forecast from 2.8% to 3.2%. This is on the back of a rise in spot TV advertising (see Advertisers Switching Back To Spot TV) and the agency is upbeat about the prospects for magazines and outdoor. The presidential election will be an effective stimulus for most media in 2004.
Europe is performing better than expected with ad revenues likely to be up by around 2.1% this year. Germany is the first of the major economies to upgrade 2003 (-0.9% to +1.5%) but this is seen as temporary and depresses 2004 growth. France, Spain and Italy have slightly downgraded with press seen as particularly weak.
The UK remains a lacklustre market with total spending barely above 2001 levels. Press shows no improvement but demand for outdoor is up and full year growth of 8% is envisaged. The same cannot be said for television advertising but Zenith is confident that the European Championships will drive revenues up 4% in 2004.
After a marked decline in 2002, adspend is on the rise in Japan this year and is expected to contribute to a 4.1% increase in Asia-Pacific as a whole.