ZenithOptimedia slashes ad spend forecast

LONDON - ZenithOptimedia has dramatically scaled back its forecast for ad spend next year, predicting that global ad spend will fall by 0.2% in 2009.

Steve King: chief executive of ZenithOptimedia
Steve King: chief executive of ZenithOptimedia

Unveiling its global ad spend report today, Zenith said "it is now clear" that the ad market is in the middle of a sharp downturn that began in Q3 2008 and accelerated in Q4 2008. Consequently, it has reduced its forecast for ad spend growth in 2009 from 4%, at the time of its last report two months ago, to a fall of 0.2% in today's report.

It warned that with consumer and corporate confidence having been shaken, "the economic outlook is uncertain", adding that "because of the general economic volatility there is greater degree of uncertainty than usual to our forecasts, and we are keeping them under monthly rather than quarterly review".

Ad spend across Western Europe will fall by 1% next year, compared with a 5.7% fall in North America and 3.2% growth in Asia-Pacific.

Zenith forecasts global internet advertising to increase by 18% in 2009, including 18% growth in North America and 12% in Western Europe, with online set to take a 15.6% share of global ad spend in 2011, 5.2% ahead of magazines and 5.6% behind newspapers, having narrowed the gap from 15.1% in 2008.

Cinema and outdoor are also earmarked for growth next year. Zenith concluded that cinema admissions often rise in times of economic difficulty while outdoor contractors are investing in both traditional displays and digital billboards that capture consumers' attention.

Zenith also expects TV to perform well globally, despite the economic downturn. It said: "As happened in the previous two downturns (in 1991-1992 and 2001-2002) advertisers will continue to shift their expenditure from secondary media to television, being familiar with its power to build brands."

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