Magna Dips Global Ad Forecast, Uptick On U.S. Regional Growth
Interpublic Group’s MagnaGlobal has downgraded its ad revenue growth forecast for 2012. The firm, part of IPG’s Mediabrands unit, now predicts global ad revenues will rise 4.8% to $480 billion, which is two-tenths of a percentage point less than its December 2011 forecast.
Magna said the downgrade is primarily due to Western Europe’s shaky economy, where ad revenues are expected to shrink by 0.2% this year.
For North America, the firm upgraded its forecast slightly, now predicting growth in regional ad revenues of 3.9% to $165 billion. That’s also a change of two-tenths of a percentage point, versus its December forecast.
For Asia-Pacific, the Magna forecast has been revised slightly downward with growth in the region now predicted to be 8.4% versus the earlier forecast of 8.5%. Within the region, Japan gets an upgrade to 2.6% growth (from 1.3%). That is based on a stronger-than-expected rebound in the first four months of the year and the low comparison base of 2011, when an earthquake and tsunami ravaged the nation’s economy.
The forecast for Australia has been downgraded from 2.1% growth to 0.8% amidst “advertiser cautiousness and political uncertainty.”
Emerging markets will account for 25% of global ad dollars, per the Magna forecast; they are driving global growth. Emerging markets in Asia will average 17% growth this year and 9% in Latin America. Among individual countries the strongest growth rates will come from Argentina (+25%), Hong Kong (+18%), China (+18%), Indonesia (+17%) and India (+13.4).
For 2013, MagnaGlobal is expecting a slightly lower growth (4.5%) followed by a re-acceleration in 2014-2016, based on macro-economic forecasts. Its current five-year compounded annual growth rate prediction for the 2012-2017 period is 5.8%. That forecast is based on what the firm sees as modest growth in North America (+3.4%) and Western Europe (+2.7%) over that period, coupled with double-digit growth in emerging markets (+12.5%).
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