Citing 'Fragile' Economy, GroupM Now Expects Advertising To Be 'Neutral To Negative'


Characterizing the world’s economy as “fragile” and showing “mild fractures,” WPP’s GroupM Business Intelligence unit issued an update to its periodic tracking of economic indicators warning advertisers to be prepared for a “downturn.”

“Concerns have risen around the health of the global economy since we published the mid-year update to …

7 comments about "Citing 'Fragile' Economy, GroupM Now Expects Advertising To Be 'Neutral To Negative'".
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  1. John Grono from GAP Research, September 4, 2019 at 4:34 p.m.

    Joe, I realise that you are merely reporting the data in the report, but the Australian data bears no resemblance to the official Bureau of Statistics data.

    For example, yesterday our annual GDP was released with an annual growth of +1.4%, the lowest since the GFC.   Retail sales for July was -0.1% with four of the six broad industries and six of the states/territories all falling. 

  2. Joe Mandese from MediaPost Inc., September 4, 2019 at 4:45 p.m.

    @John Grono: I see your point -- https://tradingeconomics.com/australia/gdp-growth-annual -- and I'll check with GroupM about it. We'll update it accordingly. Thanks for pointing it out.

  3. John Grono from GAP Research, September 4, 2019 at 4:54 p.m.

    Thanks Joe.   Maybe it was a typo and they mean Austria!   (Not that I have any idea as to how Austria is travelling economically).

  4. Joe Mandese from MediaPost Inc., September 4, 2019 at 5:44 p.m.

    @John Grono: Re. Austria -- not so good:

    https://tradingeconomics.com/austria/gdp-growth

  5. Joe Mandese from MediaPost Inc., September 4, 2019 at 5:47 p.m.

    @John Grono: This just in... GroupM's Brian Wieser explains the disparity:

    Regarding GDP and PCE, the first thing I’d note is that it’s important to note my numbers are actual figures, year-over-year on a nominal (not inflation adjusted) basis, not annualized nor “real” (inflation-adjusted) which economists would typically reference and which gets picked up in the business press.   That explains much of the difference.   I try to focus on nominal year-over-year data not seasonally adjusted where possible to produce numbers which can be compared to marketer spending or media owner ad revenue



    With the new GDP update for Australia I just pulled the data again right now - https://www.abs.gov.au/ AUSSTATS/abs@.nsf/DetailsPage/ 5206.0Jun%202019?OpenDocument(series A2302467A for GDP on Table 1, for instance) and I calculate +5.1% growth for 1Q19 and +5.2% growth for 2Q19.  For PCE I calculate +3.4% growth during 1Q19 and +3.2% growth for 2Q19.  



    The retail data is a simple average of data as captured by Refinitiv (formerly Reuters terminals) using code auRSLY=ECI

  6. Craig Mcdaniel from Sweepstakes Today LLC, September 4, 2019 at 6:16 p.m.

    I am not a buyer.  From my analyst based in online advertising and promotions, business are spending a ton more now because to the mid December China trade traiffs increases.  I don't see the car going over the cliff per say. I do see a reevaluation of 2020's products and models that might last a longer than normal. This doesn't mean a massive slow down.

  7. John Grono from GAP Research replied, September 10, 2019 at 3:58 a.m.

    Thanks Joe & Brian.

    I'm still confused about the growth figures.   The last four quarters of the first table on 5206.0 show Real GDP growth at +0.3%, +0.1%, +0.5%& +0.5% for YOY +1.4%.   That is, the value of production is adjusted for in-built price increases (labour and inputs).   It however does not adjust for population growth (i.e. it is not per-capita real GDP growth) which shows per-capita Real GDP as -0.2%.

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