Ad market will decline by 0.2%, say media groups

The global advertising market is expected to decline next year, according to forecasts by media networks GroupM and ZenithOptimedia. The two groups have drastically revised forecasts downwards for 2009, suggesting the market will drop by 0.2%.

GroupM, the consolidated WPP Group buying operation, had earlier forecast growth of 4.5% over 2009. Group M futures director Adam Smith says the agency does not expect a collapse in the ad market in 2009, but nor does it expect the “sudden improvement on the last two cycles” of downturn in 2001 and 1991.

He says: “Consumer retrenchment is simply too deep. But support for recovery is already in place.”

The group says that tightening of marketing budgets by multinational companies will slow the previously bullish growth of spend in countries such as India and China. It previously thought that growth in emerging markets would “more than compensate for the ad recession in more mature markets”.

Last month, WPP chief executive Sir Martin Sorrell (pictured) said that media owners would face a tougher time in 2009 than this year as advertising budgets shrank. He added that media such as newspapers and broadcasting
would be more attractive to advertisers as “traditional media companies in traditional markets… will be at bargain basement prices”.

Meanwhile, Publicis-owned ZenithOptimedia estimates that 89% of growth between 2008 and 2011 will be from developing countries.

In the UK alone, ZenithOptimedia has wiped £427m off its 2009 forecast from two months ago, before the effects of the recession started to bite. It now estimates the total advertising market in the UK will be worth £12.8bn in 2009.

It is also forecasting a dip in global advertising revenues next year, but says that TV advertising will benefit in 2010 and 2011 as economic conditions improve and companies look to brand-building activity.

The agency network adds that TV will attract a record 38.5% share of total global ad spend in those years. The agency also expects cinema and outdoor advertising to grow next year.

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