GroupM forecasts modest global ad recovery next year

The world's largest buyer of media still expects worldwide ad spend to fall 1.4% to $417bn in 2010, but this follows a decline of 5.5% this year.

The inclusion of Russia among the recovery trailblazers will surprise many analysts, with some now referring instead to the BIC nations, following sustained contraction in Russia's economy since the downturn took hold.

However, Russia's economy is heavily reliant on its oil reserves, and GroupM's futures director Adam Smith is confident the current $70-a-barrel oil prices, coupled with GroupM clients' commitments for the rest of the year, suggest the eastern European giant will be more resilient than many expect.

But Smith stopped short of singling out a particular quarter for growth, telling Media Week the picture would only become clearer "as we move towards Christmas".

By region, Emerging Europe is forecast to rebound from a 16.3% fall this year to a 2.7% lift in ad spend in 2010.

China’s economic stimulus is expected to have a positive impact in Asia-Pacific, with an expected 2.8% drop in spend in 2009 set to be followed by growth of 3.2% next year.

Meanwhile, media buying in Latin America continues to weather the economic turmoil, with 6.9% growth predicted for 2009, followed by 10.7% in 2010.

The more developed markets in North America and Western Europe are expected to continue to contract 4.2% and 11.1% respectively this year.

This downward trend is also forecast to continue in 2010, dropping by 6.1% in North America and 3.5% in Western Europe, supporting the view that the region which includes the UK fell faster but will recover quicker than North America.

But Smith reiterated all prospects are improving: "Advertising lagged economic recovery for about 18 months after the recession in 1992 and about 12 months after the one in 2001.

"Our global forecast for 2009 has finally stopped tumbling. The 15 countries still reporting positive ad growth in 2009 have become 22 in 2010, and the number could rise as we phase through the year."

The report also revealed that packaged goods marketers contributed significantly to sustained advertising during the recession, while auto and financial companies retreated furthest.

This resulted in television and out-of-home adding global ad investment share, and newspapers continuing to shed almost one share point annually.

Despite broadband saturation and advertising cutbacks in many developed economies, digital media continued to display growth, rising from 10% of global ad investment in 2007 to a predicted 15% in 2010.