GroupM Issues Ad Forecasts

LONDON/NEW YORK: GroupM has revised its ad forecasts for the year, predicting a 4.4-percent drop in spending to $425 billion in 2008, as compared with its previous estimate of a 0.2-percent fall to $458 billion.

The U.S. alone will experience a 4.3-percent drop in 2009, with a further 6.8 percent contraction in 2010. Issuing the new figures, GroupM’s futures director, Adam Smith, noted that when adjusted for consumer price inflation (CPI), the global 4.4-percent drop equates to a fall in real terms of 7 percent. “The 2008/2009 period is now a more serious advertising recession in scale, duration, and relative to the global economy, than the extraordinary 5.1 percent real-terms post-dotcom global advertising correction of 2001,” Smith said. 

GroupM’s chief investment officer, Rino Scanzoni in New York, noted that in the U.S., 2010 will show a sharper decline as a result of marketing budgets being cut in the wake of the recession. "GroupM is the largest single buyer of media in the world and our figures are based on our own proprietary revenue data base across media,” Scanzoni said. "Any optimism we feel about the U.S. this year is expected to be mitigated by a further spending decrease in 2010.” 

In Western Europe—where Germany is said to be the most-resilient ad market—GroupM forecasts a 6.7 percent decline to $100 billion. In Eastern Europe, the company forecasts a 15.8-percent fall to $14.3 billion. In Asia Pacific, the previous 6.5-percent growth rate has been lowered to a 3.3 percent fall to $112.7 billion. The Latin American ad market is forecast to have an 8.2 percent growth rate to $20.9 billion. For the Middle East and North Africa, GroupM predicts a flat market at $12.9 billion.