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Strong AP recovery prompts Zenith to revise forecast

ASIA-PACIFIC: Analyst optimism about the growth prospects for advertising in Asia Pacific has increased, with ZenithOptimedia upgrading its forecasts for regional adspend in its latest quarterly report examining the health of the industry.

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The revised figures follow a significant hike in HSBC's predicted growth in regional GDP, a key indicator for the industry's health. ZenithOptimedia has pushed up its forecasts for this year's regional adspend growth by almost an entire percentage point since its last report in July, to 7.3 per cent. The agency has also notched up its 2005 and 2006 predictions by smaller amounts.

"Our new forecast is slightly more bullish than last time," commented Adam Smith, the agency's head of knowledge management.

The main beneficiary of the rosier forecasts will be broadcasters, now looking at a much better year than expected, with predicted growth in TV advertising now set at 8.5 per cent, compared with 6.6 per cent three months ago. However, the outlook for increased internet advertising, while still strong, has been toned down from 33 to about 30 per cent.

"In Asia it would appear that advertisers are turning their raised spending to TV first, which is the classic pattern," Smith commented.

It appears concerns over the stability of the Chinese economy, combined with the perceived impact of a weak dollar and high oil prices, have receded, leading to more optimistic forecasts.

ZenithOptimedia feels that China's rapid spend growth will slow to half the speed it was last year in 2006, though it will maintain double-digit growth alongside India, Indonesia, Pakistan, the Philippines, Thailand and Vietnam.

Japan is also returning to growth with an initial burst of 4.7 per cent this year, the first expansion in the country's depressed ad market for three years, slowing to 1.5 per cent in 2006. Regional growth excluding Japan will hit 10 per cent for the next two years, reducing significantly once Japan, representing almost half of Asia's adspend, is included.

This article was first published on Media Asia

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