Carat offers more upbeat forecast on ad spend

Carat has upgraded its global and UK adspend forecast for the second time within six months, and is now predicting UK growth in 2010 of 3.5%, compared to the 2.9% it forecast in March.

Adspend: Carat upgrades forecast for global expenditure
Adspend: Carat upgrades forecast for global expenditure

The revised forecast from Aegis-owned Carat reveals a stabilisation across the major markets, headed by a positive rebound in the US and growth in Asia Pacific and Latin America.

It is the second media agency to positively revise its forecast adspend figures, after ZenithOptmedia last month published its third upgrade in a row.

In the UK, Carat forecast a year-on-year growth of 3.5% in 2010, but has revised its prediction down from 4.2% to 4.1% for 2011.

Commenting on the UK market, Carat said it was experiencing a "slight resurgence", driven by the TV and online market, and had witnessed incremental growth in the first two quarters of 2010.

It said: "The total market in the second half is looking reasonably buoyant and we expect growth of between 2% and 3% in the period."

However, the report points out that overall growth across western Europe continues to be slower than other markets, impacted by weaker growth prospects in Germany and Spain.

Jerry Buhlmann, chief executive of Aegis, said: "Carat's revised global forecast adspend for 2010 and 2011 is further evidence of a rebound in advertising markets.

"The indications are that global spending this year will rise by 3.9%, a 1% upward revision from the forecast of six months ago, which is a further signal of an increasingly optimistic environment.

"Overall, while the short-term economic outlook remains uncertain, these forecasts are an encouraging sign."

Across sectors, all media is expected to return to growth in 2010, with the exception of newspapers and magazines.

The TV market, which fell 4.9% last year, will witness the highest share of global ad spend at 44.8% in 2010, although this is down from the 45.2% forecast in March.

The TV market’s growth is set to continue in 2011 at 6.2%.

Newspapers will boast the second-highest share of spend in 2010 at 19.9% according to Carat, despite a forecast ad revenue fall of 3.2%.

The decline is expected to slow to 1.3% in 2011.

Online will have an 11.3% share of the market in 2010, buoyed by a growth of 13.5%. Magazines, which was the sector worst hit last year with a fall of 20.1%, will see a drop of 0.8% in 2010 and a rise of 1% in 2011.

Radio, which dropped 10.7% last year, is predicted to be up by 4.2% this year and 5.7% in 2011.

Cinema and outdoor, the two smallest media in terms of global ad spend, are expected to grow this year by 2.9% and 3.9% respectively.

Carat global advertising forecasts
  Year on year % growth -   at current prices  
  2009 2010 2011
Global -9.2 (-9.0) 3.9 (2.9) 4.7 (4.0)
USA -14.1 (-14.1) 1.1 (0.2) 1.7 (1.4)
CANADA -2.2 (-3.6) 3.6 (1.2) 4.5 (2.1)
WESTERN EUROPE -11.9 (-11.3) 1.3 (0.6) 2.7 (2.1)
UK -12.0 (-12.0) 3.5 (2.9) 4.1 (4.2)
GERMANY -8.1 (-7.4) -0.5 (-2.6) 0.9 (-1.2)
FRANCE -11.3 (-6.3) 2.9 (1.7) 2.7 (2.8)
ITALY -13.8 (-13.8) 1.5 (0.2) 2.9 (1.5)
SPAIN -18.9 (-24.3) -1.5 (-2.0) 1.1 (1.0)
NORDICS -17.1 (-17.4) 4.2 (0.1) 3.5 (2.3)
C&EE -22.8 (-21.3) 5.0 (3.0) 10.2 (6.5)
RUSSIA -26.0 (-24.5) 10.8 (1.5) 15.3 (6.9)
ASIA PACIFIC -1.2 (-0.5) 8.2 (6.8) 7.6 (7.2)
JAPAN -11.8 (-11.8) -3.1 (-3.1) -3.1 (-3.1)
CHINA 12.4 (12.2) 16.8 (16.1) 15.3 (16.6)
AUSTRALIA -8.0 (-5.0) 7.5 (2.3) 5.8 (3.2)
LATIN AMERICA 8.7 (4.6) 11.2 (11.2) 14.0 (9.9)
BRAZIL 10.4 (7.6) 12.7 (11.6) 14.4 (10.1)
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