WPP’s GroupM is preparing to issue a forecast downgrade for 2015 ad-spending growth that’s nearly one percentage point lower than its original prediction made last December.
The company’s top forecaster — Adam Smith — provided some headline numbers from the new report during a conference call with analysts on Wednesday.
Smith reported that GroupM now believes that total global spending growth for the year will be 4% -- down from the 4.9% (to $538 billion) the firm had forecast earlier.
A primary reason for the downward revision, Smith said, was the lackluster U.S. TV ad sales market, which is now expected to be flat versus the earlier prediction of a 1% gain. Spending in Brazil, Russia, China and Greece are also expected to be lower than originally thought.
TV’s share of spending is expected to drop 1.5 percentage points to 43% on a global basis this year, Smith said. By comparison, 20% of net new growth will come from digital.
Smith said he was “reluctant” to point to any “structural decline” within the TV medium, which he said “remains in demand” in many parts of the world. He also said the industry needs to revisit “how we define TV” noting the various screens that a single piece of content can now air on.
Smith also noted that spending will grow more in 2016. GroupM is currently projecting 4.8% spending growth for next year, driven in part by the quadrennial U.S. Presidential election and World Cup events as well as the Olympics.
In North America, spending is expected to grow 3.1% this year and 2.7% in 2016, per the revised GroupM forecast. In Western Europe the comparable figures are 2.2% and 2.8%; in Latin America, 8.8% and 10.2%; and in Asia Pacific, 5.6% and 7.2%.