Drop in ad spending may end in 2010

July 07, 2009|Associated Press

A key advertising forecaster said yesterday that global ad spending shows signs of reaching bottom as some sectors held up better than expected during the second quarter.

Although ZenithOptimedia, a unit of French advertising conglomerate Publicis Groupe, slashed its 2009 spending estimate for a second time this year, the forecaster now expects a mild recovery next year and a stronger rebound in 2011.

As expected, ad spending fell steeply in finance, automotive, and business travel. But sectors such as retail and consumer goods have performed better than projected, and ZenithOptimedia said year-over-year ad spending in the second quarter fell at a slower pace than the prior quarter.

“The second quarter was not as tough as the first quarter,’’ ZenithOptimedia said in a report. “We have held our expectations for the rest of the year steady, as signs emerge that the downturn is approaching its nadir.’’

ZenithOptimedia said it now expects worldwide ad spending to fall 8.5 percent to $456.5 billion. In April, after first-quarter results fell below expectations, ZenithOptimedia had slashed its forecast to a decline of 6.9 percent, sharper than the 0.2 percent drop it had projected in December.

Nearly a third of the 79 markets covered by ZenithOptimedia still show growth this year, with China and India as the heavyweights among those mostly younger and smaller growth regions.

The outlook isn’t as cheery for most of the rest of the world this year, with the worst performance expected in North America, Europe, Africa, and the Middle East.

In the United States, ad spending for TV, radio, magazines, newspapers, outdoors, and the Internet is expected to fall 10.6 percent to $154 billion - the lowest level in six years.

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