• by Joe Mandese  @mp_joemandese, October 8, 2004

Noting that "worldwide advertiser confidence holds despite oil and consumer uncertainties," ZenithOptimedia Group Friday substantially improved its outlook for ad spending over the next couple of years. The new forecast, which revised an update issued in July, actually modestly downgrades U.S. ad spending growth in the U.S. modestly for 2004, but revises it upward for 2005 and 2006. Europe, Asia-Pacific and worldwide ad spending estimates also improved for 2004.

All markets were upgraded significantly for 2005 and 2006. The report also projects that European ad expenditures are poised to grow faster than in the U.S., and that there is "particular strength in emerging markets of Asia, Middle East, Russia and Turkey."

"We calculate advertising expenditure in the major media of print, broadcast, cinema, out-of-home and the Internet currently occupies 0.99% of economic output in the 57 countries we monitor," states ZenithOptimedia in its new report. "This is slightly ahead of our mid-year 2004 projection of 0.98% and we expect this improved ratio to remain stable in 2005 and 2006. "

In predicting relatively strong U.S. ad expansion in 2005 and 2006, the agency notes that the "positive news comes through despite falling consumer confidence indices." In fact, the expectations of media planners and buyers have been steadily improving, according to a periodic tracking study of MediaPost's Advisory Panel in research conducted by InsightExpress.

Ad Spending Growth (Major Media*)

                  ----2004----
----2005----   ----2006---- 
                  Old      New   Old      New   Old      New 
U.S.              +5.6%  +5.5%   +3.8%  +4.2%   +4.8%  +4.8% 
Europe            +4.2%  +4.7%   +4.0%
+4.4%   +4.5%  +5.1% 
Asia-Pacific      +6.4%  +7.3%   +5.4%  +5.7%   +5.2%  +5.5% 
Latin America     +5.4%  +4.7%   +5.0%  +5.2%   +6.1%  +6.7% 
Rest of World    +12.9% +13.4%  +11.4% +11.3%
+11.0% +11.2% 

Worldwide         +5.7%  +6.2%   +4.6%  +4.8%   +5.1%  +5.6% 

Zenith Optimedia Group. *Newspapers, magazines, TV, radio, cinema, outdoor, Internet. Old = July 2004 estimates; New = October 2004 estimates.