US research points to slow ad sector recovery

The advertising sector in the US is not likely to recover in a hurry.

Two prominent researchers, Zenith Media and Taylor Nelson Sofres have independently squelched hopes of an advertising about turn in the next two years.

Zenith Media has predicted that it would be 2004 before growth returned and even then, revenues would lag behind those of previous years. The agency says revenues would only return to the levels seen in 2000 when there was a widespread recovery in corporate profitability. It believes that by the end of 2002, Europe's five largest economies will have shed eight per cent of their 2000 advertising volume in real terms and "will have done well to replace five per cent of this by 2004".

The group also says that last year global ad revenues fell 6.4 per cent in constant terms and 3.8 per cent at current prices. The Zenith study, say media reports, has indicated that global annual advertising market for major media peaked in 2000 and thinks it will trough in 2002, having contracted by $23bn in real terms.

Although the media has been playing up possibilities of an advertising revival last week, Taylor Nelson Sofres' CMR unit has also made some dismal projections. While it has projected that US ad spending, buoyed by a second-half rebound, will grow 2.5 percent to some $109 billion during 2002, the agency has network cable will not participate in the resurgence and will instead sustain a slight decrease. According to CMR projections, network cable ad spend will dip 0.3 per cent for the year, while network TV will register a 4.5 per cent advance for the year. Other would be media gainers, according to CMR are radio (6.7 per cent), local newspapers (5.7 per cent) and the Internet (5.3 per cent).

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