Global adspend growth set to rise says ZenithOptimedia

by Jennifer Whitehead,, Brand Republic 08-Oct-04, 12:00

LONDON - ZenithOptimedia has upped its forecasts for global advertising growth next year, and said that Europe remains on course to grow faster than the US in 2005.

The media agency said that it was predicting a global adspend growth rate for the year of 6.2%, compared with its mid-year forecast of 5.7%, after calculating that adspend currently occupies 0.99% of economic output, up from its mid-year forecast of 0.98%.

In Europe, the advertising-to-GDP ration is recovering from 2003's low of 0.78% to 0.8% and rising. ZenithOptimedia said it expected the UK and France to sustain stable ratios seen before the dotcom boom, while the recovery in Germany and Italy is strong.

Jonathan Barnard, knowledge management manager at ZenithOptimedia, said: "The growth comes partly from the quadrennial effect, the Olympics in some countries, Euro 2004 and the US Presidential elections, and this was taken to account. But we are also recovering from the recession that began in 2001, with adspend now recovering to a percentage of GDP that is normal."

Overall, ZenithOptimedia is forecasting that European adspend will grow by 4.7% this year. Next year, it sees growth of 4.4% for Europe, ahead of the US figure of 4.2%. The figures compare with the Advertising Association's prediction of 4.4% growth in 2005 for UK adspend, but are ahead of Carat's forecast last month of 5.7% growth for 2004.

ZenithOptimedia said that broad-based demand for above-the-line advertising in sectors including retail, automotive, telecoms and financial services was helping. It also said that fear among marketers of lack of consumer confidence could actually help to drive some demand for advertising, especially in sectors such as motors in the US.

The report is based on information from 57 countries monitored by ZenithOptimedia. The full Advertising Expenditure Forecast is published quarterly and can be bought from ZenithOptimedia.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.