GroupM Downgrades Global Ad Spending Forecast

NEW YORK: GroupM has revised its biannual worldwide advertising spending forecast for 2013 downward to $507 million, reflecting a 3.4-percent growth rate compared to the 4.5-percent rate predicted in December of last year.

The downward revision was attributed to continued economic issues in the Eurozone, which is the same reason the GroupM revised its 2012 forecast downward.

Adam Smith, GroupM’s futures director, said: “The Eurozone periphery, specifically Italy, Spain, Portugal, Greece and Ireland, is once again the main reason for the decline. Stabilization is elusive. We now expect this group to record an 11-percent fall in measured advertising in 2013.”

In its first prediction for 2014, the This Year, Next Year forecast predicted that global ad spending will increase 5.1 percent compared to 2013, reaching $533 billion. It also revealed that the 2012 spending for measured media hit $490 million, a 3.6-percent gain over spending in 2011.

“We estimate marginal growth in advertising spending in 2014 on a comparable component basis,” said Rino Scanzoni, GroupM’s chief investment officer for North America. “However the Sochi Winter Olympic games will add an additional 50 basis points to the growth rate with funding coming primarily from existing budgets.”  

For the U.S. market, ad investment in measured media is expected to grow 1.8 percent in 2013 to $156 billion, up from the $153 billion in 2012. For 2012, there is expected to be a 2.9-percent increase in spending, to $161 billion. For Western Europe, spending in 2013 is expected to decline 2.4 percent compared to the prior year, to $97 billion. Spending in 2014 is expected to rise only 1.8 percent, to $99 billion. Smith added that the Eurozone periphery accounted for 7 percent of global advertising investment before the economic crisis and now accounts for only about 3 percent although this group’s nominal GDP changed little during the same period.