Magazine article Editor & Publisher

Zenith Optimedia: Global Ad Spending to Drop -- Again

Magazine article Editor & Publisher

Zenith Optimedia: Global Ad Spending to Drop -- Again

Article excerpt

For the second time this year, Publicis Groupe media agency network Zenith Optimedia has downgraded its 2009 global and North American ad spending forecasts.

The firm said its latest revisions were made after estimates for Q1 ad expenditures were found to be too high.

ZO now says global ad spending this year will drop 8.5 percent to $456.5 billion. In April, ZO had predicted a 6.9 percent falloff for 2009. Just four months earlier, in December 2008, the shop projected that worldwide outlays would be down just 0.2 percent this year.

For North America, ZO now predicts a 10.3 percent drop in '09 ad spending to $162.7 billion, worse than the 8.3 slide it had forecast in April, which in turn was steeper than the 5.7 percent decline it initially predicted for the region back in December.

"Faced with extreme uncertainty, advertisers in most sectors planned for the worst and cut their costs in anticipation of steep drops in revenue," the agency said. "In uncertain times, advertising is often treated as a discretionary expense and cut early, despite much research that shows companies maintaining their ad expenditure in a recession come out of it stronger than those that do not."

The agency is also predicting what it calls a "mild global recovery" for 2010, when spending is expected to rebound with a 1.6 percent increase to almost $464 billion. Spending will continue to rise in 2011, up 4.3 percent to $484, the agency said.

North America, however, will face a third straight year of spending declines, ZO believes, down 2. …

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