• by Joe Mandese  @mp_joemandese, September 13, 2003

In another positive sign that traction in the global ad economy is building, Zenith Optimedia Group has once again revised its 2003 ad spending forecast upward due to a strengthening of the U.S. ad recovery, as well as improvements in key ad sectors in Japan and Germany.

Instead of the 2.9% rate of global ad expansion Zenith forecasted earlier this year, the global agency media network now anticipates an expansion of 3.2%, according to a revised forecast being released today.

"This upward revision is mainly attributable to the USA and in small part to Europe," the agency said in its update.

Zenith's Revised Ad Growth Outlook

                 2002    2003    2004    2005 
North America   +2.1%   +3.2%   +4.9%   +4.0%

(USA)           +2.0%   +3.2%   +5.0%   +4.0% 
Europe          -0.3%   +2.1%   +3.9%   +3.9% 
Asia Pacific    +1.0%   +4.1%   +4.8%   +5.8% 
Latin America  -12.0%   +0.8%   +3.3%   +4.6%

Rest of World  +18.4%   +9.9%  +11.2%  +10.4% 
Worldwide       +1.0%   +3.2%   +4.8%   +4.6% 

Source: Zenith Optimedia Group's September 2003 Forecast.

The revision is consistent with a wide variety of incidental indicators that have been mounting, including improvements in the earnings results of major marketers and increasing confidence in ad spending plans from top Madison Avenue executives.

Zenith also cited a rebound in technology and telecommunications spending as factors in a Japanese ad recovery, and noted that Germany is experiencing a modest rebound, the first of the major European industrialized nations to do so since the ad downturn began.

However, Zenith said it regarded the German ad expansion as "temporary" and actually downgraded its ad outlooks for France, Spain and Italy.

"All are badly in need of a tug from the U.S.," said Zenith, which found good reason for a sustainable U.S. ad expansion. Citing and improvement in the overall U.S. economy since its July report, the Zenith report actually upgraded its outlook for 2003 and 2004 ad spending for cable TV, syndicated TV and spot TV.

"We are seeing a surge in advertisers going into the local marketplace based on a strong network scatter market," reports that agency. "Automotive, furniture stores, home and department stores, banks and package goods are categories that have increased their spend in the first half of the year."

Zenith also was especially upbeat on the outdoor ad outlook, noting that key out-of-home categories such as distilled spirits, fashion, telecommunications and entertainment are growing at healthy rates and are expected to continue through 2005.

The outlook for consumer magazines is less clear. While the publishing industry continues to show a steady improvement in ad demand from automotive, drugs/remedies, toiletries/cosmetics, home furnishings and apparel, Zenith said "concerns remain due to an increase in 'just-in-time' media commitments from advertisers who are making decisions to release print dollars just as issues are closing."