Zenith positive about the US ad economy, not about Europe

MUMBAI: A recent report by a reputed US-based global media agency has provided some optimism in the advertising world. More so, because this agency's forecasts on the ad economy have always been amongst the most conservative.

In its latest report, media major Zenith Optimedia, owned by Publicis of France and the UK's Cordiant group, has actually revised its forecast for 2003 advertising revenue in the US and the projected growth estimates. The report estimates that the forecasted growth will rise to 2.2 per cent from the earlier projected figure of 1.9 per cent. In real terms, this would entail a real growth of 0.2 per cent for US advertising after taking inflation into account.

The report has also forecast a growth of three per cent in US TV Network ad spend and two per cent in radio spot spends. Zenith has also upgraded its forecast for US advertising revenue growth in 2004 to 4.5 per cent from 3.6 per cent. report

Zenith Optimedia knowledge management manager Jonathan Barnard states that the war might shift spending rather than affecting it as long as no untoward events happen.

The report adds that improved corporate profits will drive this growth in advertising. Recently, American corporations have adopted a conservative financial approach wherein they have cut down excess expenses and reduced head counts. It is believed that the corporations will reap the benefits of these moves in this year and companies will be able to spend more on advertising, says the report. However, consumers aren't too happy as the unemployment rate that has topped six per cent.

Consumer growth is heading below one percent but the report mentions that the real driver for ad spending during recession times is corporate profitability rather than consumer spending.

US TV, radio spends:

Zenith has also revised forecasts upwards for the television spends. It now expects that network TV will be up three percent this year, to $16.3 billion. Zenith feels that the current trends in terms of ad inventory sold for the coming TV season augur well for the TV ad spends.

The report adds that the other factors pointing to a strong TV market are the "firm" scatter factor for 2003 despite consumer and stock market weakness. Certain categories such as auto, retail and refinance and real estate have either upped or maintained spends.

Zenith Optimedia has also revised upward its national spot radio forecast for 2003 to two per cent from 0 percent, with auto, telecom and retail as the key drivers.

Outlook on Europe, Japan:

The Zenith report has downgraded its forecast for the six other global advertising economies - five western European countries and Japan.

Zenith has downgraded its five-country European forecast for 2003 to 0.4 per cent from the 1.8 per cent forecast made in December. This extinguishes any hope of real growth this year in the region.

The company also downgraded 2004 forecasts for Europe to 3.2 per cent from 4.2 per cent. Forecasts for Japan have been downgraded too, to 6.8 per cent from -3.5 per cent. Zenith's Barnard feels that this negative outlook is due to regulation and culture in western Europe and Japan.

Outlook on the US:

Zenith predicted that advertising revenues would fall by 1.4 per cent in real terms in the UK this year. In current prices, Zenith slashed its expectations for the UK to growth of 1.1 per cent from 2.1 per cent predicted as recently as December. This fall has been attributed to weak corporate confidence which has stunted advertiser confidence.

The report added that the UK market was flat in 2002, although it fell 2.1 per cent in real terms, allowing for inflation.

Zenith is also predicting UK TV advertising will grow a modest one per cent in current terms, dragged lower by advertisers switching from ITV to cheaper cable and satellite channels. However, the growth of multichannel TV, where ad breaks are longer and more frequent, was positive longer term for the sector.

Press advertising in the UK is expected to see little growth in 2003, with consumer magazines suffering in particular and only outdoor, radio and cinema likely to post real growth, Zenith added.

Reports indicate that Zenith's views contrast with those of Aegis, a rival media buyer and research group, which predicted a 2.6 per cent rise across Europe in 2003. Most forecasters, including WPP's Sir Martin Sorrell, expect a full recovery to wait until 2004, when the US presidential elections and the Olympic Games in Athens will boost demand.

Latest Reads
Gulzar lightens up Luminous's Diwali

MUMBAI: Luminous has launched a unique social campaign that celebrates a part of Diwali that we often forget to talk about. While most Diwali campaigns talk about spending and splurging, others talk about the display of lights and fireworks across the country. This campaign, however, goes away from...

MAM Marketing MAM
Multi-media ad campaign to popularise gold coin

A year after it was first launched, a multimedia advertising campaign is being launched to drive awareness around Diwali on the availability of the Indian gold coin by the Mines and Minerals Trading Corporation along with World Gold Council. Being launched this week, the campaign will cover...

MAM Media and Advertising Ad Campaigns
Vizeum launches Binary, special advisory unit for media clients

“Media business is, in the short term, headed for a tipping point, driven by the changing consumer-media interface,” emphasises Vizeum India MD Shripad Kulkarni, who strongly believes that media companies need a definitive transformation strategy in place now.

MAM Media and Advertising Media Agencies
Havas Media bags Rs 15-cr Sujata account

MUMBAI: Havas Media Group India has bagged the integrated media duties of Sujata, an Indian Consumer Electronics & Home Appliances brand for Juicer Mixer Grinders. The incumbent on the business was Exposure Media. The account will be handled out of Gurgaon office led by Uday Mohan. The...

MAM Media and Advertising Account
TV festive ad spend to reach Rs 8000 cr; experts divided

MUMBAI: The festive months of October and November are welcome months not just for you and your family, but for most Indian brands as well. After all, they eagerly wait for this early window when consumers loosen up their purse strings and put their Diwali bonuses to good use, aka, shopping.

MAM Marketing MAM
Amagi partners with BARC India to offer monitoring of geo-targeted TV ad-campaigns

Amagi Media Labs has entered into a partnership agreement with India’s apex television viewership monitoring body BARC India to help advertisers monitor geo-targeted ad-campaigns of brands across TV channels.

MAM Media and Advertising AD Agencies
iProspect conceptualises unique digital video for ICICI two-wheeler insurance

iProspect India has conceptualized and executed a unique digital video for ICICI Lombard General Insurance in their latest campaign on two-wheeler insurance.

MAM Media and Advertising AD Agencies
eBay engages consumer with live game on FB

MUMBAI: Festive season is a busy time for Indian brands, especially the e-commerce players given the shopping spree the nation witnessed around the time. Thus it becomes important to brainstorm on new and unique ways to get the consumer’s attention; something different from the unbelievable...

MAM Media and Advertising Ad Campaigns
Culture Machine & Quaker Oats aim to feed kids

As the festive mood gathers spirit in the country, Culture Machine’s digital channel Being Indian, in collaboration with Quaker Oats, have released a new campaign. Titled "Ek Muthi Sonu ke Naam", the video urges people to pause and spare a thought to the millions of children who go hungry.

MAM Media and Advertising Ad Campaigns

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories