Global ad spend to fall 0.2% in 2009, says new GroupM study
US spending to drop 3% to $157 billion.
Global ad spending in measured media is expected to drop by 0.2% to $458 billion in 2009, compared to the previous year when spending was up 2.6%, states a new study from GroupM, the global parent company of WPP agencies worldwide.
Titled This Year, Next Year, the study says the projected decline is the first retreat in global advertising since the 3% fall in 2001, after 2000′s dotcom-driven ad growth of 15%.
The study, part of GroupM’s media and marketing forecasting series, also predicts that ad spending in the U.S. will fall 3% to $157 billion in 2009, following a 0.3% increase to $162 billion in 2008.
Presenting the study in New York, GroupM’s futures director, Adam Smith, said: ‘Advertisers are scrutinizing every penny – automotive and financial services categories have obviously seen weakness across 2008, and retail will be under pressure as we move beyond its busiest fourth-quarter into 2009.’
‘Among our own client base, we are not seeing wholesale cancellations, but we are seeing migration from expensive and less tried-and-true media to value and certainty.’
Smith identified internet ad spending as the only significant growth area, but noted that despite a projected 5% increase in 2009, spending is still down, compared to an expected 16% growth this year. He added that the world’s other leading internet economy, the U.K., mirrored U.S. projections with rates of 4% in 2009, compared to 22% in 2008. Worldwide, internet ad growth is predicted to slow down from 22% in 2008 to 10% in 2009.
‘We do not expect an ad collapse in 2009, but nor do we expect the sudden improvement of the last two cycles,’ says Smith. ‘Consumer retrenchment is simply too deep. However, the good news is that some support for recovery is already in place – for instance lower gasoline and raw materials prices have fallen, thereby freeing up funds for other purposes such as marketing.’
‘Brands which were strong enough to raise prices when commodities spiked are even better placed and most of all, the strategy-minded advertiser knows recessions are a rare and brief opportunity to build share at bargain prices.’
The full ‘This Year, Next Year’ report, which contains forecast figures for almost 50 nations worldwide, including the BRIC countries (Brazil, Russia, India and China) will be released December 12.