Buckle up. Bumpy road ahead.
Many economists and business leaders consider ad spending a leading economic indicator. If that is true, the needle is pointing down.
In March, GroupM, the parent of WPP agencies, estimated that global advertising would decline 4.4% this year.
But they changed their minds, and quickly.
GroupM now expects global advertising spending to drop 5.5% in 2009.
The GroupM study, “This Year, Next Year,” forecast that ad expenditures in the US would fall 4.3% in 2009—followed by a 6.5% drop in 2010.
In fact, ad spending growth in the UK, Canada, France, Germany, Italy and Japan is expected to lag Brazil, Russia, India and China.
“China’s economic stimulus has already bolstered confidence, and the demand for advertising in Russia will recover quickly if $70-a-barrel oil prices are here to stay,” said Adam Smith of GroupM. “Brazil and Indonesia remain among the top growth contributors, and India is predicted to come back strongly after pausing in 2009.”
As a result, things do not look quite so dismal everywhere.
Worldwide, GroupM is predicting a mild recovery in 2010 with the overall decline easing to “only” 1.4%, for total spending of about $411 billion.
According to MediaPost, saying that “some sort of recovery is at hand” was about as positive as GroupM was willing to be.
“Our global forecast for 2009 has finally stopped tumbling,” said Mr. Smith. “The 15 countries still reporting positive ad growth in 2009 has become 33 in 2010, and the number could rise as we phase through the year.”
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