Global ad spend is expected to drop 6.6% to $445 billion in 2009 with a mild growth of 0.8% now expected in 2010 to $448 billion, revised up from a 1.4% fall in the previous 70-country forecast report from GroupM.
The BRIIC nations (Brazil, Russia, India, Indonesia and China) are expected to lead the recovery while ad spending in the U.S. and Western Europe will probably lag behind, according to the report.
The study, “This Year, Next Year” is part of GroupM’s media and marketing forecasting series drawn from data supplied by WPP’s worldwide resources in advertising, PR, market research, and specialist communications. It was released by GroupM Futures Director Adam Smith and GroupM Chief Investment Officer Rino Scanzoni at the UBS Global Media and Communications Conference.
“We expect the BRIC and Next 11 countries to underwrite ad growth with a pronounced V-shaped recovery which is already underway in China,” said Smith. “In the US and many mature economies, deleveraging and sluggish job creation will likely postpone recovery until 2011.”
Ad spend in the US is expected to fall 8.0% this year followed by an anticipated 4.3% drop in 2010, according to the report. Those figures compare to an average 8.4% decline in 2009 followed by a 2.8% drop in 2010 in the G7 nations
(Canada, France, Germany, Italy, Japan, the U.K., and the U.S.).
Smith stressed that global prospects for ad recovery in 2010 are improving: “There are signs from around the world of confidence returning to the financial services and automotive sectors which have been hit hardest, though this has yet to translate into bigger marketing appropriations. Fast Moving Consumer Goods, personal care and telecommunications are widely cited to have sustained their advertising through the recession, but marketers everywhere, particularly in the U.S. and Western Europe, are looking for further savings and more value from media markets in 2010.”
GroupM’s new long-range model expects global ad revenue growth to return to annual growth in the range 6%-7% from 2011-2014, around a point ahead of expected nominal global GDP growth.
Media USD m, current prices | |||
2008
|
2009f
|
2010f
|
|
NORTH AMERICA
|
169,007
|
155,797
|
149,640
|
yoy %
|
-1.9
|
-7.8
|
-4.0
|
LATIN AMERICA
|
22,712
|
24,307
|
26,860
|
yoy %
|
10.6
|
7.0
|
10.5
|
WESTERN EUROPE
|
122,121
|
106,520
|
104,848
|
yoy %
|
-1.7
|
-12.8
|
-1.6
|
EMERGING EUROPE
|
21,220
|
17,364
|
18,455
|
yoy %
|
12.5
|
-18.2
|
6.3
|
ASIA-PACIFIC (all)
|
127,329
|
126,818
|
133,583
|
yoy %
|
5.8
|
-0.4
|
5.3
|
NORTH ASIA
|
47,740
|
50,202
|
55,388
|
yoy %
|
18.1
|
5.2
|
10.3
|
ASEAN
|
9,845
|
10,480
|
11,694
|
yoy %
|
10.2
|
6.5
|
11.6
|
MIDDLE EAST & AFRICA
|
13,780
|
13,802
|
14,774
|
yoy %
|
20.9
|
0.2
|
7.0
|
WORLD
|
476,169
|
444,609
|
448,159
|
yoy %
|
1.8
|
-6.6
|
0.8
|
|