Ad Spend Forecast Down Even More

Arrow-Downon-Money-AA2This year is unlikely to go down as a banner one for the advertising industry. According to marketing intelligence company Warc, global ad spending (based on 12 major markets) will only increase 3% in 2013, down a full percentage point from the company’s forecast from November 2012. 

Already expected to be less robust than last year (which had the Olympics and a U.S. presidential election going for it to boost spending), further concerns about the global economy (particularly the debt crises in Europe, and economic slowdowns in China and India) as well as domestic spending cuts just coming into effect led to the downgrade, according to Suzy Young, data and journals director, at Warc.

"With few major political or sporting events this year, global advertising spend growth was always expected to be slower than in 2012,” Young says. “The Eurozone debt crisis also continues to depress growth both among member countries and abroad. To offset this, global ad spend will be reliant on a solid performance from the U.S. and strong growth from emerging markets."

Of the 12 major markets Warc forecasts, only Brazil and Japan were not subject to forecast downgrades, compared to the company’s 2013 reports. Though still slower than previously expected, Brazil, Russia, India and China (BRIC) will continue to be the fastest-growing markets, with increases of 9.5%, 12.4%, 7.9% and 9% growth, respectively. 

“The established markets (U.S., Japan, Western Europe) are forecast limited growth, whereas emerging markets (China, Brazil, Russia, India), where consumption is rising rapidly, will see ad spend increase at a faster rate,” Young says. 

In addition to the outlook downgrade, Warc  forecast ad spending would only increase 5.4%. When taking inflation into account, the spending was only expected to rise 0.6% this year, and 2.4% in 2014.

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