Companies dependent on advertising revenues were dealt a fresh blow yesterday after Zenith Media, an advertising buyer, cut its advertising spending forecasts again, destroying hopes of a short-term recovery.
Zenith, which is co-owned by Cordiant and Publicis, said it expected advertising spending in the US, Japan, France, Germany, Italy, Spain and Britain to shrink 2.6 per cent this year, or 4.7 per cent in real terms.
Zenith said: "In the big seven countries alone, a further $8bn (£5.5bn) has come out of our 2001 forecast over the last quarter." In 2002, the group expects advertising spending in the seven big markets, which account for 75 per cent of global advertising, to grow a nominal 0.8 per cent but to show a fall of 0.8 per cent in real terms, adjusting for inflation.
Zenithslashed its forecasts after an expected recovery had failed to materialise with the U.S. market performing worse than expected.
The estimates are far bleaker than its initial projections that expected advertising spending to rise 1.5 per cent this year. In June, Zenith estimated the seven big markets would remain flat or fall 2 per cent in real terms this year; 2002 was expected to grow by 4.1 per cent, 2.4 per cent in real terms.
"The advertising slowdown began with globalised packaged goods manufacturers, so the onset was sudden, worldwide and affected television the most. But now we see it spreading to most other product categories, advertisers and media," Zenith said.
Zenith expects advertising spending in the US to fall 4.2 per cent this year. The UK market is predicted to fall 3 per cent, Germany by 4 per cent and Spain by 1.8 per cent.Reuse content