Yet another 2009 ad spend downgrade
Zenith Optimedia revises forecasts againFor the second time this year, Publicis Groupe media-agency network Zenith Optimedia has downgraded its 2009 global and North American ad-spending forecasts.
The firm said its latest revisions were made after estimates for first-quarter ad expenditures were found to be too high.
Zenith now says global ad spending this year will fall 8.5% to $456.5 billion. In April, it predicted a 6.9% falloff for 2009. In December, the shop projected that worldwide outlays would be down just 0.2% this year.
For North America, Zenith now predicts a 10.3% drop in 2009 ad spending to $162.7 billion, worse than the 8.3% slide it forecast in April and steeper than the 5.7% decline it initially forecast in December.
"Faced with extreme uncertainty, advertisers in most sectors planned for the worst and cut their costs in anticipation of steep drops in revenue," the agency said. "In uncertain times, advertising is often treated as a discretionary expense and cut early, despite much research that shows companies maintaining their ad expenditure in a recession come out of it stronger than those that do not."
The agency also predicts what it calls a "mild global recovery" for next year, when spending is expected to rebound with a 1.6% increase to almost $464 billion. Spending will continue to rise in 2011, up 4.3% to $484 billion, the agency said.
North America, however, will face a third consecutive year of spending declines, Zenith predicts, down 2.4% to $159 billion in 2010. The numbers finally will turn positive for the region in 2011, when the agency says spending will rise 1.5% to $161 billion.
Zenith is the second big shop to recently predict a mild global recovery for next year. Two weeks ago, WPP's GroupM also said the outlook for 2010 was looking better but still in the negative column, with a 1.4% decline to $411 billion. GroupM sees ad spending in 2010 being worse in North America, with a 6.1% drop to $151 billion after a 4.2% decline this year.
By medium, Zenith projects Internet ad spending will grow 10% globally this year, ahead of its 8.6% prediction in April. By 2011, it expects Internet spending to account for 15% of all ad outlays, up from 10.5% in 2008. Most of that growth will come from paid search ads, the shop said. In the U.S., Zenith predicts search will grow 20% in 2009, the traditional online display category rises 3% and online classified ads increase 1.8%. Microsoft's launch of its new search engine, Bing, should spur further innovation in search, it said.
The Internet is the only medium Zenith expects to grow this year. Among other media, it predicts television, cinema and outdoor will shrink by 7.1%, 4.8% and 7%, respectively.
Newspaper ad expenditures will drop 14.7% in 2009, and spending in magazines will fall 16.7%, the agency said.