| LONDON, July 6
LONDON, July 6 The downturn in global
advertising is approaching its lowest point and, after a fall of
8.5 percent in 2009, the industry should see a mild recovery in
2010, a leading media agency predicted on Monday.
ZenithOptimedia said it had revised down its forecast for
2009, from an earlier prediction of a 6.9 percent drop, after
the first quarter came in worse than expected.
WPP's (WPP.L) GroupM agency said in June it expected global
advertising to drop 5.5 percent in 2009 before a mild recovery
"Faced with extreme uncertainty, advertisers in most sectors
planned for the worst and cut their costs in anticipation of
steep drops in revenue," the Zenith report said.
Of the different platforms, the Internet is the only medium
expected to grow in 2009, while television, cinema and outdoor
advertising are set to decline by less than the overall market.
Advertisers say using the Internet allows brands to be
flexible and see consumer response rates, which is important
during a downturn.
Zenith forecast Internet advertising expenditure growth of
10.1 percent in 2009 and said it expected the medium to account
for 15.1 percent of all advertising expenditure by 2011, from
10.5 percent in 2008.
"Most of this growth will come from paid search, which is an
ideal method of reaching consumers looking for bargains," the
"In the U.S. we predict search advertising to grow 20
percent in 2009, while traditional display grows 3 percent and
classified grows just 1.8 percent.
However with the move of money from print to online, the
newspaper industry has been hurt. Newspaper advertising was
predicted to shrink 14.7 percent while magazines face an even
tougher time as luxury advertisers pull back.
Zenith said the sectors of finance, autos and business
travel had all suffered steep revenue decline while retail,
fast-moving consumer goods and value products fared better.
"For all sectors the shape of the rest of the year is
becoming clearer," it said. "Q2 was not quite as tough as Q1,
and we have held our expectations for the rest of the year
steady, as signs emerge that the downturn is approaching its
For 2010, Zenith predicted a recovery and growth of 1.6
"Looking at the different regions, those that went into the
ad downturn first will suffer the most and come out of it last.
We expect North America to shrink a further 2.4 percent in 2010,
after shrinking 3.7 percent in 2008 and 10.3 percent in 2009."
(Editing by David Cowell)