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GroupM forecasts global ad spending to fall 5.5% in 2009

GroupM forecasts global ad spending to fall 5.5% in 2009
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First Published: Thu, Jun 25 2009. 02 37 PM IST
Updated: Thu, Jun 25 2009. 02 37 PM IST
Mumbai: In the latest 70-country forecast report from global media specialist GroupM, global advertising spending in measured media is projected to drop 5.5% to $417 billion in 2009 with a mild recovery expected in 2010 when the decline should ease to 1.4% or $411 billion.
As expected, the so-called Bric nations (Brazil, Russia, India and China) are expected to lead the recovery, though ad spending in the US and the G7 nations (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) are expected to lag behind, according to the report.
The study, ‘This Year, Next Year’ is part of GroupM’s media and marketing forecasting series drawn from data supplied by parent company WPP’s worldwide resources in advertising, public relations, market research, and specialist communications. It was released yesterday by GroupM
Futures director Adam Smith in London and GroupM chief investment officer Rino Scanzoni in New York.
Smith said that China’s economic stimulus has already bolstered confidence, and the demand for advertising in Russia will recover rapidly if $70-a-barrel oil prices are here to stay. Rs.Rs.Brazil and Indonesia remain among the top growth contributors, and India is predicted to come back strongly after pausing in 2009.”
Meanwhile, advertising expenditures in the United States are expected to fall 4.3% this year followed by an anticipated 6.5% drop in 2010, according to the report. Those figures compare to an average 6.4% decline in 2009 followed by a 5.5% drop in 2010 in the G7 nations (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States).
Still, global prospects for a limited ad recovery in 2010 are improving, underlined Smith.
Advertising lagged economic recovery for about 18 months after the recession of 1992 and about 12 months after the one in 2001, he said. Our global forecast for 2009 has finally stopped tumbling. The 15 countries still reporting positive ad growth in 2009 has become 33 in 2010, and the number could rise as we phase through the year.
US ad spending is expected to stabilize this year and next, but will still be down. ”We expect a bottoming out on local media spend in 2009 with more stability into 2010;” said Scanzoni.
However, they are expecting further contraction on national media, particularly television, as clients adjust budgets to reflect a continued pessimistic consumer-spending forecast.
Packaged goods marketers contributed significantly to sustaining advertising during the recession, while auto and financial retreated furthest, revealed the report. This resulted in television and out-of-home adding global ad investment share, and newspapers continuing to shed almost one share point about annually.
Despite broadband saturation and advertising cutbacks in many developed economies, digital media continued to display growth, rising from 10% of global ad.
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First Published: Thu, Jun 25 2009. 02 37 PM IST
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