• by Joe Mandese  @mp_joemandese, October 1, 2009

Carat, a unit of Aegis Group, this morning issued an updated outlook for U.S. and global ad spending, asserting the marketplace decline during 2009 would be "worse than previously forecast," though the ad industry would once again return to "modest growth" in 2010. Carat said the only major medium to show any growth this year would be online, which would finally reach a 10% share of the worldwide advertising marketplace.

 

Carat's revised prediction for worldwide expenditure this year is a fall of 9.8%. The downward revision of 4.0 percentage points (from -5.8% in March 2009) is due to significant reduction of forecasts in all regions, with the exception of Asia Pacific where the 2009 forecast has been revised marginally upwards to -0.3%.

While Carat reduced its 2009 outlook, it said the global ad economy would rise 1.0% during 2010, "driven by much more stable conditions in the West and recovery in developing markets, particularly China."

Commenting on the forecasts, Jerry Buhlmann, CEO of Aegis Media, said: "These significant revisions are not unexpected in the context of the recent volatility of the market, and represent a cautious attitude towards adspend this year, most significantly in the US and Europe," stated Aegis Media CEO Jerry Buhlmann, adding, "We expect the market to bottom out in North America and Europe, and to improve further in developing markets. Even after that initial recovery, however, the global advertising market will still be below its absolute 2006 level."

Carat said U.S. ad spending during the first half of 2009 was "well below" 2008, as clients and agencies scaled back on prior ad commitments, and as new dollars failed to come into the market.

The current full year projection for U.S. ad spending in 2009 is down 16.3% from 2008, a significant decline from Carat's March 2009 forecast, which called for a 9.8% decline.

"All major media categories are tracking below last year," Carat stated. "National television and radio have been holding up better, due to their ability to drive strong reach and awareness. Newspapers continue to be hard hit by both the weak economy and consumers spending more time online. The real estate and automotive categories have cut back sharply and classified advertising is weak. Digital losses have been softened by some traditional media spend shifting over and the continued strength of search advertising. Online video has also experienced growth; however online display has been much more negotiable in terms of price.

 

Global Ad Spending Forecast By Medium (% growth at current prices)
	2008	2009	2010
Television	4.9 (5.1)	-6.3 (-3.7)	2.2 (1.9)
Newspapers	-5.9 (-5.2)	-16.7 (-12.0)	-2.7 (-3.0)
Magazines	-5.1 (-5.4)	-17.1 (-8.6)	-3.3 (-2.8)
Radio	-3.5 (-3.5)	-12.4 (-10.2)	-0.2 (-0.9)
Cinema	4.9 (4.7)	-3.2 (0.0)	1.7 (2.7)
Outdoor	0.7 (0.5)	-6.7 (-4.2)	2.4 (1.8)
Online*	16.4 (14.7)	1.0 (6.3)	8.3 (8.0)
Source: Carat. Figures in brackets show our previous forecasts from Mar 2009