ZenithOptimedia Downgrades Global Ad Spend

Publicis Groupe’s ZenithOptimedia is downgrading its global ad-spending growth outlook for 2012, the third ad forecaster to do so this month. Global CEO Steve King will provide details of the new forecast at a presentation in Cannes Tuesday morning.

Earlier, financial firm Barclays and Interpublic Group market research unit MagnaGlobal both issued forecasts that were revised downward.

Observing slower growth in both April and May, ZO now predicts that ad spending will increase by 4.3% worldwide this year to approximately $464 billion, one half of a percentage point lower than its March forecast. For the U.S. ZO is calling for 3.6% growth this year, unchanged from its March prediction.

Like Magna, ZO indicated that a significant part of the global downgrade was due to deterioration in the economic outlook for Europe, where Greek elections have “revived fears of a Eurozone break-up, causing investors to withdraw from risky assets.” As result, ZO asserted, economic growth has slowed across much of the developed world and “recessions have deepened in the Southern Eurozone.”



The shop said that Italy, Spain, Portugal and Greece are the four European markets where “ad spend is shrinking rapidly as local advertisers struggle to maintain their cash reserves, and international advertisers reconsider the long-term potential of their investments.”

Overall, ZO expects a 1.1% drop in ad expenditures across the Eurozone and growth of just 0.4% across all of Western Europe to just under $109 billion, compared to its previously predicted 1.5% growth in the region. The agency stressed that that forecast assumes the region avoids an “economic disaster,” such as the break-up of the euro.

ZO also downgraded the outlook for the Asia-Pacific region this year to 6.7% from 7.4%, and for Latin America to 7.8% from 9.2%.

For now, ZO says its earlier worldwide forecasts for 2013 and 2014 remain unchanged at +5.3% and +6.1%, respectively.

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