The media agency says the market will fall 8.5% this year before experiencing a moderate recovery in 2010.
Despite the more upbeat prediction for next year, the agency has revised down its forecast from the 6.9% slump it predicted earlier this year.
“Faced with extreme uncertainty, advertisers in most sectors planned for the worst and cut their costs in anticipation of steep drops in revenue,” the report says.
The agency, owned by the Maurice Levy led Publicis Group, forecasts online revenues will be the only growing area this year, up 10.1% in 2009 with the media expected to account for 15.1% of all expenditure by 2011.
Zenith adds most of the growth will come through paid search, which it describes as an “ideal method of reaching consumers looking for bargains”.
The report comes a month after WPP’s GroupM agency predicted the global advertising market to 5.5% before an upturn next year.