Carat downgrades ad spend growth forecasts for 2011

Aegis Media's Carat has downgraded its global and Western European advertising forecasts today, citing caution sparked by "global macro-economic factors".

Carat: downgrades ad spend growth forecasts for 2011
Carat: downgrades ad spend growth forecasts for 2011

Carat now predicts that global advertising expenditure will grow 5% this year, down from the 5.7% forecast in March 2011, while spend in Western Europe is tipped to be 33% less than previously expected, with previous growth of 3.5% adjusted to just 2.3%.

Reasons behind the downgrade were said to be "natural disasters and political instability in a number of parts of the world", although Carat adds the upbeat note that the new figures nevertheless represent growth, "outperforming the advertising market levels of 2008".

The challenging climate is also expected to have an impact on next year’s Olympic year, with previous global forecasts of 6.2% growth falling to 6% and Western Europe’s 3.3% growth now pegged back to 3%.

Downward revisions were made across the regions (see table below), with the exception of Central and Eastern Europe, where rebounding ad markets are performing stronger than anticipated, and are now set to grow at 10.1% in 2011, compared to 9.5% previously expected.

By media, digital remains the driving force in the market in terms of growth, continuing to outstrip other media sectors, followed by out of home and television.

At current prices, Carat now expects magazines to shift from a slight growth of 0.3% to a fall of 0.4% around the world this year. However, radio has seen the biggest revision for 2011, with 6.1% growth in ad spend now cut back to 4%.  

Year on year % growth at current prices

2011 2012
Global 5.0 (5.7) 6.0 (6.2)
North America 3.2 (3.9) 5.5 (5.9)
Western Europe 2.3 (3.5) 3.0 (3.3)
Central & Eastern Europe 10.1 (9.5) 11.6 (11.9)
Asia Pacific 7.1 (8.0) 6.9 (7.0)
Latin America 13.0 (13.0) 12.9 (12.9)

Global % share of advertising spend

2011 2012
Television 46.0 (46.1) 46.1 (46.3)
Newspapers 16.2 (15.8) 15.4 (15.0)
Magazines 10.0 (10.2) 9.6 (9.8)
Radio 7.1 (7.3) 7.1 (7.3)
Cinema 0.6 (0.6) 0.6 (0.6)
Out of home 7.1 (7.0) 7.2 (7.1)
Digital 13.0 (13.0) 14.0 (14.0)

Global year on year % growth at current prices

2011 2012
Television 6.0 (6.7) 6.2 (6.5)
Newspapers 0.1 (0.3) 0.6 (0.6)
Magazines -0.4 (0.3) 2.3 (2.0)
Radio
4.0 (-6.1) 5.5 (6.5)
Cinema 5.2 (5.6) 3.8 (5.6)
Out of home 6.3 (7.2) 8.1 (7.8)
Digital 13.3 (13.6) 14.4 (14.5)

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