• by Wayne Friedman , March 31, 2009

Group M says that while global ad spending will continue to fall in 2009, next year will be worse.

The big media agency group says that 2009 will now drop 4.4% to $425 billion. But 2010 looks to see a steeper decline -- 6.8%.

Group M revised its numbers that it laid out in December 2008. At that time, Group M estimated that 2009 would be virtually flat globally -- with a 0.2% decline to $458 million. In the U.S., Group M says media investments would drop 3% to $157 billion.

Key to next year's drop, according to Group M Chief Investment Officer Rino Scanzoni, is that the U.S. federal government's stimulus package is not expected to have an immediate positive impact on ad spending. Scanzoni says it does little to drive consumer spending in the face of high unemployment, help a weak housing sector, or stem commodity inflation.

Now Group M says that North America media investments will drop by 6% this year, when adjusted for inflation. The worst territory next year will be emerging European countries, which will see an 18.1% drop. The best-performing territory continues to be Latin America.

Western Europe will see an 8.5% gain, with Germany proving to be the best-performing country, and the most resilient to advertising declines.

Still on the upswing is China, which will see a 3.2% rise in 2009.

In December 2008, Group M said China would have a 13% gain this year. It says the decline is attributed to consumer retrenchment and a credit crunch in retail distribution, which the government stimulus might alleviate.

Group M Global Forecast:

Media USD (in millions) current prices
	2007	2008f		2009f
NORTH AMERICA	170,983	172,033		164,770
Year over year %	2.7	0.6		-4.2
LATIN AMERICA	16,858	18,766		20,296
Year over year %	11.3	11.3		8.2
WESTERN EUROPE	108,171	107,204		99,984
Year over year %	6.3	-0.9		-6.7
EMERGING EUROPE	15,532	17,040		14,355
Year over year %	19.1	9.7		-15.8
ASIA-PACIFIC (all)	109,452	116,603		112,784
Year over year %	7.5	6.5		-3.3
NORTH ASIA	38,532	45,475		46,426
Year over year %	14.5	18.0		2.1
ASEAN	8,076	8,860		9,071
Year over year %	9.2	9.7		2.4
MIDDLE EAST & AFRICA	10,726	12,968		12,893
Year over year %	23.1	20.9		-0.6
WORLD	431,721	444,612		425,082
Year over year %	6.1	3.0		-4.4

 

Media investment year over year %, adjusted for CPI
	2007	2008f	2009f
NORTH AMERICA	-0.1	-3.4	-6.0
LATIN AMERICA	6.6	4.1	1.7
WESTERN EUROPE	4.1	-4.1	-8.5
EMERGING EUROPE	11.5	1.1	-18.1
ASIA-PACIFIC (all)	4.9	1.7	-6.8
NORTH ASIA	9.8	11.3	-2.1
ASEAN	5.2	0.2	-5.3
MIDDLE EAST & AFRICA	14.9	7.7	-8.0
WORLD	3.0	-1.6	-7.0