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Leading analyst expects adspend to rise

NEW YORK - Advertising spend is expected to rise in 2002 if only modestly, according to a senior industry analyst at Merrill Lynch who has upgraded her forecast.

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Lauren Rich Fine said she expected to see a 0.4% increase on 2001 in advertising spend in the US in 2002. This reverses a previous forecast in which she had predicted a decline of 1.5%.

The real growth she said would not come until 2003, when she is forecasting an increase of between 4% and 4.5%. Previously, she had forecast an increase of just 4%.

According to the Merrill Lynch report: "Many media companies continue to post ad revenue gains and/or are close to a positive turn. The ad agencies are lagging, however, as is typically the case, as it will take a heightened level of corporate confidence to start ordering new ads or launch new products that require new ad campaigns."

The Merrill Lynch forecast is in line with other thinking in the industry, which is predicting a slow and steady improvement.

Yesterday Sir Martin Sorrell, the WPP Group chief executive, said that the industry might have to wait until 2004 for economic conditions to significantly strengthen. He said he saw the situation improving in 2002 and again in 2003, but that it might not be until the following year that the world economy shows strong signs of recovery.

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