Carat Forecast For Ad Spending Outpaces Universal's

On the heels of Universal McCann's revised advertising forecast, Aegis Group's Carat unit issued its own revisions this week, slightly downgrading its outlook for U.S. ad spending in 2007, and issuing its first projections for 2008, which generally were more upbeat than Universal's.

Carat projected that U.S. ad spending, buoyed by Olympic-year spending, would rise 5.6% above 2007, more than half a percentage point greater than the 5.0% rate of growth anticipated by Bob Coen, Universal McCann director of forecasting.

Likewise, Carat projects a higher rate of growth for global ad spending, which it forecasts will grow 6.4% in 2008, nearly a point higher than Universal's estimate of a 5.5% rate of growth worldwide.

"In 2008, the Beijing Olympics will drive further acceleration in growth rates in the USA and Asia-Pacific to 5.6% and 9.3%, with the former receiving a boost from the presidential election," the U.K.-based media services agency predicts in the new report. "Online will continue to outgrow the rest of the industry by some margin, but we would also expect to see increasing impacts from new hardware and technologies, including 3G, HD radio and multi-casting and IPTV and other forms of interactive broadcasting."



In fact, Carat said, "digital investment" continues to be the "single biggest driver" of ad spending in every region and country across the globe, though trends vary by market depending on the maturity of traditional media outlets.

Generally speaking, Carat anticipates that newspapers will continue to be the slowest-growing of the major media segments, while consumer magazines will continue to outperform the print publishing category. Both forms of print advertising will be offset by stronger digital and online sales.

Carat's estimates differ from Universal's in one other important regard. Unlike Universal, Carat predicts advertising industry growth will "comfortably" outgrow world GDP in 2007, said Aegis Media CEO Mainardo de Nardis.

In fact, that seems to be Carat's expectations for the U.S. as well. Although Carat reduced its U.S. ad forecast by one-tenth of a point to a growth rate of 5.1%, that's two points higher than the 3.1% forecast by Universal and is likely enough to keep U.S. ad spending at pace or ahead of U.S. GDP this year.

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