GroupM Cuts Its Ad Spending Forecast For 2013

WPP’s GroupM isn’t as optimistic about the rate of this year’s global ad spending growth as it was back in December when it made its initial projection. The firm has cut its forecast for 2013 to $507 billion, a gain of 3.5% over 2012. Earlier the shop had called for a 4.5% increase this year. The outlook for 2014 is somewhat better—The Group is projecting a 5.1% gain worldwide to $533 billion.

The company said it reduced its spending forecast for this year because of “continued economic discord” in the Eurozone. GroupM Futures director Adam Smith cited Italy, Spain, Portugal and Greece as countries that continue to struggle with little if any relief in sight. “Stabilization is elusive,” he said. “We now expect this group to record an 11% fall in measured advertising in 2013.”

Western Europe also continues to face tough economic conditions and spending there will fall another2.4% this year to $97 billion, GroupM predicted. Next year will be only slightly better, with a projected gain of 1.8%, GroupM said.



With the new forecast GroupM also issued a final tabulation for 2012 expenditure, reporting that it reached $490 billion, a gain of 3.6% over 2011.

But growth in the U.S. will remain sluggish compared to the worldwide outlook, with 2013 growth pegged at just 1.8% this year to $156 billion. The initial view for next year is a little better with spending predicted to grow nearly 3% to $161 billion.

But if the 2014 Olympic Games scheduled for Sochi, Russia are excluded from the mix, growth next year will be “marginal” stated Rino Scanzoni, Chief Investment Officer, GroupM North America. The games will add about one-half of a percentage point to the total “with funding coming primarily from existing budgets,” added Scanzoni.

Meanwhile bright spots continue to include Central and Eastern Europe, Asia and Latin America where spending growth will remain in the high-single-digit or low-double-digit growth range for this year and next, the GroupM report concluded.

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