Masso Group

"The advertising industry is presently in a severe slump..."Global advertising growth this year has been downgraded to 4.4% on the back of worsening economic conditions, in a forecast by Universal McCann's Insider's Report. The report has revised its 2008 forecast of 4.6% in December 2007 to 4.4%, because consumers' disposable personal income has failed to improve in recent months. Bob Coen, the author of the report and senior vice-president and director of forecasting at Universal McCann's Magna, has also lowered his forecast

for US advertising growth from 3.7% to 2%. Coen said he expects advertising growth in most developed industrialised countries such as the UK to be modest and quite similar to the US.

On the positive side, newly emerging markets in countries such as China, Russia, India and Brazil, will push overseas ad growth to 6.3%.

Combined total worldwide advertising spend in 2008 is now expected to total $667.9bn (£337.2bn).

Coen said: "The advertising industry is presently in a severe slump. Eventually there will be an upturn in the need for more advertising time and space to announce the eventually modified automotive and transportation facilities and a return to more growth in the housing sectors, but not much is expected by 2009."

Looking ahead to next year, Coen said that the economy should improve, but it is not likely to spur much expansion in ad spending in 2009.

He said: "There will not be extra Olympic or election ad spending in 2009 and, although the comparisons will be easier, not much improvement is likely until 2010."

In a separate report published at the same time, Coen has made a number of predictions concerning emerging media trends.

The report, called 'Magna Emerging Media Forecast', said online search advertising will remain the largest emerging media category, with growth of 24% to £13.8bn in 2009.

The forecast underlines why Microsoft is continuing to persist in its lengthy pursuit of Yahoo! in a bid to redress its faltering position in search advertising and catch up with Google, the market leader.

Social media, which is often accused of failing to turn the huge popularity of websites such as MySpace and Facebook into hard cash, is set to benefit from improved monetisation, with growth of 37.4% to $1.474bn.

Online video has been singled out as the fastest growing emerging media platform, with growth of 45% to $805m.

Elsewhere, gaming will grow by 27.4% to $296m, while mobile will grow by 42.6% to $298m.

 

(Source: Advertising Age)