Global ad spend prediction dips to 4.4% drop

In order to reflect recent economic changes, GroupM released a revision to its December report that lowballed global ad drop at 0.2%. Canada's predicted ad spend reduction is less gloomy at 2.9%.

Global ad spend is expected to drop by 4.4% to $425 billion US in 2009 over the previous year – 4.2 percentage points more than was predicted in December, according to a revised interim report released yesterday by GroupM, the parent company of WPP media agencies like Mindshare and MediaCom. In Canada, it’s predicted media investment will drop by 2.9% in 2009 over the previous year, or by $9.6 billion.

In its bi-annual ‘This Year, Next Year’ report published in December 2008, GroupM predicted global ad spend would decrease in 2009 by 0.2%. But in order to reflect the worsening in the economic environment in the past few months, the media investment management operation now reports a change in forecast based on its proprietary media database.

The 2008-2009 period is a more serious advertising recession in scale and duration than the post-dotcom global advertising disruption of 2001, says Adam Smith, GroupM futures director in London, putting the severity and the prediction change into perspective.

Canada still fares better than the US, where ad spend is expected to fall by 4.3% (7% in real terms) or $155 billion, and the UK, where media investment will sink by 11.2% or $15.5 billion, according to the report. Emerging economies like Brazil and China are still expecting increases in ad spend of 10.5% and 3.2% respectively.

More detailed figures will be released in the June 2009 edition of ‘This Year, Next Year,’ according to a GroupM spokesperson in New York. But the outlook for 2010 is dismal, with the interim report cautioning the end-of-decade year will show a more severe decline as a result of marketing budgets devised in the throes of the current recession.