Spend on ads to recover in 2004

Sustained recovery in global advertising expenditure is not expected until 2004, according to the latest report from Zenith Optimedia Group.

Global advertising spend is expected to be down 1.7 per cent in real terms for 2002 compared with 2001. Advertising expenditure in North America, Europe and Latin America will continue to decline with Asia-Pacific the only growth market.

ZOG predicts a slight recovery next year with a growth in global adspend of 1.2 per cent to $311 billion. This will continue with a 2.5 per cent rise during 2004.

UK ad expenditure will decline in real terms by 3.1 per cent this year and 0.4 per cent next year, according to the twice-yearly Advertising Expenditure Forecasts report. It predicts a real-terms rise of 0.9 per cent for the UK in 2004.

Like WPP, which last week predicted a slow move toward recovery in 2004, ZOG is suggesting that growth will be led from North America, which will see a boost in ad revenues sooner than European markets such as the UK and Germany. The US, which ZOG predicts will suffer a 2.8 per cent fall in adspend this year, is predicting a 0.3 per cent growth next year and 1.9 per cent growth in 2004.

The report highlights that by the end of 2002, the five major European economies (Germany, the UK, Spain, France and Italy) will have shed 8 per cent of their 2000 advertising volume in real terms. ZOG predicts they will have replaced around 5 per cent of this by the end of 2004.

John Perriss, the chief executive of ZOG, commented: "Looking over the past two or three years we have seen a close correlation between advertising spend and corporate profitability and until we see this corporate profitability improve we won't see adspend increasing significantly. The second wave of Enronitis is not helping a lack of confidence by clients and the visibility of their future trading is unclear."


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