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

While hope of a quick 2002 turnaround is now fading for the advertising fraternity everywhere, recovery is already underway in Asia excluding Japan, according to Zenith Optimedia. The agency, in its advertising expenditure forecast, says advertisers are still reluctant to make long term spending plans.

In the Asia Pacific, the agency says, ad expenditure across major media (newspapers, magazines, television, radio, cinema, outdoor) is expected to rise marginally from USD 64,128 to USD 66,736 next year to USD 69,703 by 2004. Zenith is pessimistic about Japan's ad recovery, but says Asia ex Japan will grow at 7 per cent constant in 2002 (December: 3 per cent), with 2003 and 2004 averaging 6 per cent.

Gross advertising billings Q1 2002 Vs Q1 2001 %

Real growth however remains distant, according to Zenith's estimates. 2002 bottom line at -0.5% current and -1.7% constant is fractionally down from December numbers, says the study. Asia and North America are having a slightly better 2002 than they expected six months ago, but Europe has downgraded from 1.7% current-price growth this year to -0.7% shrinkage following a tougher than expected first quarter.

Except for the US which shows a marginal hike, gross ad billing in Q1 2002 across Europe and Asia has taken a dip over the same period last year. By the end of 2002, the five big European economies will have shed 8 per cent of their 2000 ad volume in real terms. According to Zenith's forecast, they will have done well to replace 5 per cent of this by 2004 end, by when all five could be back on the health track.

Global advertising shrank by over six per cent in real terms in 2001, twice as deep and double the speed of the ad recession ten years ago. The global annual ad market for major media peaked in 2000 and Zenith expects it will trough in 2002 having contracted by $23 billion in real terms, of which it expects only $3 billion back in 2003 and a further $7 billion in 2004.

In North America, media fragmentation - the exodus of large network audiences to myriad cable channels is causing media cost inflation even when demand is moderate, says the agency. In the US, says the study, consumer confidence remains high and inflation low. The agency has projected a 1.2 per cent current-price decline in major media adspend for 2002, a slight upgrade on its last projection. In 2001, the decline was 6.1 per cent. In the US, the network television market enjoyed a well-sold February Olympics and generally firm airtime pricing thanks in large part to audiences being kept in short supply by network TV losing share to cable channels. The recent network television 'upfront' (advance sales for the new season beginning September) has been quite strong, but may not guarantee the networks a healthy increase in revenues in 2003, the study points out.

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