Carat: Global Ad Spend Forecast Dips, U.S. Holds
Carat, the flagship media agency of London-based Aegis Group, has downgraded its global ad spending forecasts for both 2012 and 2013. The agency
cited sluggish growth in developed markets as one reason for the downgrade.
The agency knocked a full percentage point off its estimate for global growth in 2012, estimating that the year’s spending will now be up 5%, not the 6% growth it estimated in March. It also shaved one-half of a percentage point off its 2013 growth estimate to 5.3%.
“These latest forecasts are consistent with our view of the two-speed world, whereby we continue to see significant growth from the faster-growing regions of the world versus the lower levels of growth in the developed economies of the U.S. and Western Europe, with Western Europe being impacted by low or negative growth, particularly in Southern Europe,” the agency stated.
In the U.S., however, the agency did not downgrade its forecast. Instead, it maintained an estimate of 4.9% growth for 2012, while modestly upgrading the outlook for 2013 to 5.3% from the previously forecast 4.2%.
The shop downgraded Western Europe to negligible growth this year, up 0.2% versus the previously forecast 1.5% growth. Next year the region should see a growth uptick to 1.1%, but not as strong as the earlier forecast of 2.2%.
The agency also downgraded high-growth areas. China’s growth forecast for 2012, for example, was reduced to 11% from nearly 15%. Next year, China will grow nearly 10%, and not the 15% that Carat had earlier predicted. Among faster growing markets, only Latin America received an upgrade for 2012. Carat said the region is now expected to grow 12% this year -- up from the earlier forecast of 10.7% -- while Brazil should see nearly 13% growth this year, up from the previous estimate of 10.5%.
Carat added that its data shows global digital ad spending will overtake newspaper ad spending this year, sooner than previously expected. Earlier, the agency predicted that digital would overtake newspapers in 2013, as audiences continue to move online.
Aegis CEO Jerry Buhlmann stated that the combined trends of the "two-speed world" with increasing usage of digital media by consumers is making the media landscape "increasingly complex," while creating "exciting new growth opportunities for global advertisers." The pressure on agencies, he added, is to be both focused and specialized while offering "global reach and scale to provide innovative integrated solutions."
The revised Carat forecast follows several other recent downgrades in predicted global spending from firms, including GroupM, ZenithOptimedia, Barclays Bank and Interpublic’s MagnaGlobal.