Newspaper article International New York Times

Caution Is the Theme in Ad Agency Forecasts ; Chief of WPP Expects Brighter '14 over All, but Mixed Outlook for Europe

Newspaper article International New York Times

Caution Is the Theme in Ad Agency Forecasts ; Chief of WPP Expects Brighter '14 over All, but Mixed Outlook for Europe

Article excerpt

Martin Sorrell of the large advertising group said the European economy remained a question mark and could affect advertising spending next year.

The chief executive of WPP, the world's largest advertising group by revenue, says that caution remains the watchword for marketer clients of agencies owned by WPP and others.

"Net net, 2014 better than 2013," Martin Sorrell said Monday, tersely summarizing his expectation for advertising spending growth next year compared with this year. However, he added, "I have to underline yet again, clients are exceptionally cautious."

One reason for that caution, Mr. Sorrell said during a presentation on the opening day of the 41st annual UBS Global Media and Communications Conference, is that marketers exist "in a world where economic growth is limited, where it is still below trend."

There is growth, he added, but marketers need to "wage hand-to- hand combat to get that growth."

Another reason for caution is the continued uncertainty created by the "deadlock in Washington," Mr. Sorrell said, and over how the next installment of the wrangling over the federal budget, in January and February, will turn out.

That doubt is "still the biggest gray swan," Mr. Sorrell said, riffing on the expression "black swan," meaning a major, unforeseen event; a gray swan, he said, is "a known unknown."

Earlier on Monday, before Mr. Sorrell's presentation, the senior managers of three major media agencies presented their forecasts for worldwide advertising spending for next year. All three forecasts predict an increase in worldwide spending in 2014 compared with 2013, but one, for GroupM, was revised downward from its most recent previous forecast.

"GroupM is not as bullish as the other forecasts," Mr. Sorrell said, citing questions about the demand for advertising time and space next year in big markets like Japan and the United States.

Adam Smith, the futures director of GroupM and who presented the GroupM forecast, said in an interview that, "We can call this a recovery when the U.S. recovers."

Another question mark for next year comes in the form of demand in Europe. …

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