Zenith Revises Forecast
- by Paul Gough , September 9, 2002
The company, owned by Publicis of France and Cordinant Communications Group PLC of the United Kingdom, updated its forecast that had been made in July. Zenith Optimedia had expected a 0.5% decline in its July prediction.
U.S. ad spending will drop 2.5% this year, Zenith Optimedia said, compared to a predicted drop of 4%. It’s one of several countries that will underperform in ad spending compared to the world average. Japan and the United Kingdom are two other countries that underperformed.
Forecasted major-media spending rose by $1.6 billion in the United States. The stronger-than-average spending figures were due to an upturn in local-market spending in an election year. The agency said increases were also reported in several other categories, including automotive, retailing, telecommunications and films.
The agency says prices are firm and inventory is tight in local TV, local radio and out-of-home. There’s been a stabilizing in the newspaper industry, with stronger fall ad demand.
TV turned in a stronger-than-expected upfront season, although Zenith Optimedia threw some water on the rosy scenario, noting that upfront is only a quarter of TV sales and the sales can be canceled. Firmness in the TV scatter market is offset by network, cable and syndication TV results. Zenith said activity in current bookings is hedging against the possibility of another tight scatter market in 2003 rather than an influx of new demand.
In the United Kingdom, Q2 TV revenue rose on the strength of the World Cup, turning an 11% decline in 2001 to a 5% increase.
“It is the best indication of recovery so far, though we do not expect television to make substantial progress in the forecast period,” Zenith said. U.K. newspaper ad spending is expected to drop 3.5%.
Zenith Optimedia Group’s quarterly update of the Advertising Expenditure Forecasts account for 73% of the world’s advertising expenditure.
