GroupM Revises 2012 Ad Forecasts

NEW YORK: Economic uncertainty in Europe and the U.S. has prompted GroupM to lower its forecasts for ad-revenue growth this year from 6.3 percent to 5.1 percent.

The group has previously expected global adspend this year to reach $522 billion; it is now forecasting an increase to $506.4 billion. Last year, ad spend rose 5 percent to $482 billion, according to GroupM’s latest This Year, Next Year report. The company is predicting a 5.3 percent hike in 2013 to reach $533.2 billion.

For the U.S., the 2012 forecast has been revised from 4 percent to 3.6 percent, with ad revenues expected to reach $152.5 billion. For next year, GroupM sees an even more modest increase of 3.1 percent to $157.2 billion.

“We attribute the decline in U.S. ad spending to a number of factors, including a loss of economic momentum, the global deterioration from all continents but particularly the Eurozone and political and fiscal uncertainty at home for the election and beyond,” said Rino Scanzoni, GroupM’s chief investment officer.

Greece, Ireland, Italy, Portugal and Spain collectively saw ad revenues fall 6 percent last year, with a further 8.8 percent decline forecast for this year. Stabilization is expected for 2013, GroupM says. Overall in Western Europe, ad revenues were relatively flat last year and are expected to remain so this year at $102 billion, rising just 1.6 percent to $103.6 billion next year. CEE, meanwhile, which rebounded by 12.5 percent last year, is forecast to see an 8.3 percent gain this year to $19.6 billion and an 8.2 percent gain next year to $21.2 billion.

The Latin American forecast for 2012 is 11.6 percent growth to $31.6 billion, following a 13.2 percent increase in 2011. The forecast for 2013 is ad spend of $35.3 billion. In the Middle East, meanwhile, following a 5.8 percent hike last year, growth for 2012 is expected at 8 percent to $18.5 billion, rising by 9.3 percent next year to $20.2 billion.

The Asia Pacific, which grew by 7.7 percent last year to $155.8 billion, will eclipse North American adspend in 2012 with $169.1 billion, rising a further 7.8 percent in 2013 to $182.3 billion.
 
Globally, TV has reached a record high share of 43 percent of measured global media investment in 2011. However, Adam Smith, the company’s futures director, commented, “the continued development of internet advertising, notably video, will now possibly nip at TV’s nominal share, though some internet video investment will simply return to different  pockets of the same TV vendors.”