ZenithOptimedia: U.S. Ad Spend Slightly Up, Global Forecast Cut
ZenithOptimedia has cut its global advertising expenditure forecast again for 2011. In its latest forecast, released today, the Publicis media agency network trimmed its worldwide spending growth prediction by half a percentage point to 3.6%, resulting in total expenditures of $466 billion.
In July, the agency predicted growth of 4.1%. The July estimate was also a downgrade from ZO's first detailed forecast for the year, made back in December of 2010, when it forecast 5% global spending growth.
In the U.S., ZO now predicts that 2011 ad spending will be up 2.2% to $155 billion, a slight upgrade from its July estimate when it predicted spending would be up 2.1%. But the latest estimate is down from December, when the shop predicted spending growth here would reach 2.5% this year.
Globally, ZO's forecast notes the risk of further economic downturn ahead, but reports that "the current consensus is that the developed economies face a sustained period of below-potential growth instead of decline, while developing markets will continue to grow rapidly, if at a cooler pace than in 2010."
ZO said its latest forecast makes several key assumptions. The first is that "economic growth remains weak in Europe and the U.S., but neither goes into double-dip recession." Second, it assumes that the Eurozone debt crisis "does not get substantially worse."
ZO said it now sees North American ad spending growing at a modest 3.3% to 2013 while Western European ad growth will be slower, growing at the more modest rate of 2.8%. "The continuing debt crisis in [Europe] has damaged advertisers' confidence in Western Europe's long-term growth prospects," the forecast stated.
Latin America ad spending is expected to grow at a faster clip, averaging 7.1% annually through 2013, while the Asia Pacific region will grow 10.1% a year through the same period. That excludes Japan, still recovering from a devastating earthquake and tsunami, which is expected to grow just 1.1% a year.
Ad expenditures in Central and Eastern Europe are predicted to grow 10.4%, while spending in the Middle East and Africa will drop sharply -- by 14.2% this year, given all the political turmoil in the region. The average annual decline through 2013 is forecast at 3.6% for the region, per ZO.
As for the U.S., ZO predicted that spending growth will be tepid through 2013, given current economic conditions. The agency is predicting 3.5% growth in the region during both 2012 and 2013.
"The economy is still recovering, and it will take several years for advertising spending to reach the level it was at in 2008," the forecast states. "Fortunately, most of the large financial, retail and automotive spenders have returned to the marketplace."
The forecast predicted a continuing shift of ad dollars from network TV to cable television, with cable up 12% this year and network TV down 2%. Internet will remain the fastest-growing medium in the U.S. this year, up 12.6%, while print will continue to suffer, with newspaper advertising dropping more than 8% in 2011.