A key advertising forecaster sharply lowered its global ad spending forecast Tuesday, saying the ad market took a substantial turn for the worse in the past few months as companies tightened their belts in the face of an economic slump.
ZenithOptimedia, a unit of French advertising conglomerate Publicis Groupe, now expects a year-over-year decline of 6.9 percent to $453 billion this year, a pace that is worse than the 0.2 percent dip for 2009 it had projected in December.
Even the reliably faster-growing Asia-Pacific region is expected to see declines as trade falls off rapidly.
Ad spending in North America is now predicted to fall by 8.3 percent to $166 billion, the bulk of which is from the United States. U.S. ad spending is forecast to decline by 8.7 percent, worsening from December’s projected drop of 6.2 percent for 2009. This year’s spending levels suffer in comparison to last year, which was boosted by such special events as the Olympics and the presidential election.
Spending in Western Europe is expected to drop by 6.7 percent, with Spain showing the steepest drop at 10 percent, followed by the U.K. at 8.7 percent.
Asia-Pacific is projected to decline by 3.4 percent, as increases in China and India are offset by a slump in Japan, which comprises 38 percent of ad spending in the region. Central Europe and Latin America also should see declines.
Globally, ZenithOptimedia noted that companies are waiting until the last moment to commit to spending on advertising, which many treat as a discretionary expense. It doesn’t see a rebound in ad spending until corporate profits improve. Key is how governments around the world tackle the problem of bad debt and whether stimulus plans will jump-start growth.
In this downturn, consumers are spending more time at home, watching TV and surfing the Internet. It gives a glimpse of why online and TV ad spending should have a be tter showing.
Global ad spending on the Internet is the only medium expected to see an increase this year, up 8.6 percent to $54.3 billion. Advertisers can more easily measure their effectiveness – such as how often users click – making them more attractive than other media as budgets tighten. However, online ad spending is slowing down from last year’s 21 percent growth.
Ad spending on newspapers is expected to fall 12 percent to $107 billion, and spending on magazines is projected to decline by 11 percent to $49.1 billion.
Internet ad growth should be driven by a 9 percent increase in spending on search ads, traditionally the largest generator of online ad revenue. Classified should rise by nearly 2 percent, while traditional display ads should fall by a similar percentage.
Advertising around newer formats – such as Internet video and podcasts – are projected to rise by double-digits. But they comprise merely 12 percent of the online ad market, whic h itself was 10 percent of the overall ad market in 2008.
Television ads, while projected to fall by 5.5 percent to $173 billion, remains one of the better performers among the different media. ZenithOptimedia said advertisers that slash their ad budgets across the board tend to cut TV last.
Auto ad spending remains grimly weak with some pockets of optimism, such as in France and Germany where government incentives boosted auto sales and thus, advertising.
Ad spending from the financial sector has fallen off sharply, but retail and packaged goods are holding up as they advertise good deals to cash-strapped shoppers.
Future Craft Launches Under The Aegis of EP Johnny Parker; Shop Forges Alliance With U.K.’s OB42
Executive producer Johnny Parker has launched Future Craft, a content production studio which opens with a directorial roster that includes Brennan Stasiewicz, Henry Mason, We the Grimshaws, Kai Kurve, Sune Sorensen, Tim Hamilton, Jennifer Roberts, Little Village, Marcus Lundin, and Shaunoh Wilson.
Parker had been at the helm of production company Hey Baby which after eight years in business has been reimagined as Future Craft, with an expansion into branded content including long-from, experiential and photography alongside and integrated with advertising campaigns. Central to this evolution is Future Craft’s partnership with OB42, a U.K. production shop headed by the sr. management team of Otis Bell and Clancie Brennan. Via their strategic alliance, Future Craft and OB42 will share talent resources and develop projects for both the U.S. and Europe.
Parker said, “Future Craft was built on creating a home for some of the most talented creatives in the industry. Forthcoming global partnerships will redefine the lines between commercial and entertainment storytelling. I can’t wait to usher Future Craft into the here and now.”
OB42’s managing director Brennan said, “Johnny’s reputation in the industry came highly recommended to Otis and I, and we are thrilled to share the same vision. Future Craft’s roster complements our strategy for pursuing more narrative led advertising while leaning into more emotional and human campaigns that resonate with a wider audience. We have already collaborated on numerous productions and look forward to many more.”
Future Craft’s strategic alliance with OB42 and its parent company 42 fosters cross-pollination between advertising and branded entertainment, with a widened talent pool for... Read More