Crystal Ball Offers Pleasant View at 2 Big Conferences

Last week, as the Dow Jones industrial average finally climbed back to the 10,000 mark, the ad industry’s top pundits and agency leaders looked ahead to 2004 with renewed hope—in the U.S., at least. For Europe, the outlook remains considerably darker.

At Credit Suisse First Boston’s annual Media & Telecom Week Conference at The Plaza and the 31st annual UBS Media Week Conference at the Grand Hyatt, attendees heard truly good news for the first time since the ad recession struck in 2000. Predictions for upticks in ad spending in the U.S. in 2004 ranged from just less than 5 percent to almost 7 percent.

“Things are looking a little better,” said Doug Flynn, chairman and CEO of London-based Aegis Group, parent of Carat, who spoke at the UBS conference. He noted that in the second half of 2003, corporations have become more interested in investing for top-line growth—and leaders have begun to do that, forcing others to follow. “It’s a slow, somewhat uncertain climb,” Flynn said.

Bob Coen, svp of forecasting for Interpublic Group’s Universal McCann, saw a 6.9 percent increase in ad spending in the U.S. next year over 2002, to nearly $266 billion. John Perriss, CEO of Publicis Groupe’s ZenithOptimedia and traditionally a more cautious predictor, forecast a 5.1 percent increase, to $156 billion. (UM’s numbers include direct mail and Yellow Pages adspend; Zenith measures only major media.)

Worldwide predictions for 2004 adspend also trended upward, with estimates ranging from just less than 5 percent from Perriss (to $343 billion) to almost 6 percent from Coen (to $498 billion). But Perriss, Coen and others urged caution about Europe, which Perriss warned “may never regain the lost share.”

WPP Group finance director Paul Richardson, who presented at both conferences, concurred. Europe continues to be “a tough market for the industry,” he said.

WPP, Aegis and Publicis presented snapshots of their 2003 performance and their top-line forecasts for 2004 at the UBS conference; WPP and Publicis also outlined their strategic priorities for the coming year. (Neither IPG nor Omnicom Group made presentations this year. Since last month, IPG, still in financial recovery, has limited its contact with Wall Street to its own quarterly-earnings conference calls; Omnicom, the performance leader in the industry, does not always attend the conferences.)

Publicis CEO Maurice Lévy said he sees growth opportunities in France and Germany. In terms of service offerings, he cited multicultural marketing and healthcare communications as growing categories, noting the group’s success last week in the $200 million Sanofi-Synthelabo review. In the U.S., Publicis is also in the process of merging Hispanic units Publicis Sanchez & Levitan and Bromley Communications [Adweek, Dec. 8].

Richardson said the recession is still “quite tough” for WPP’s PR and brand-identity units and that the company will seek to “increase its competitive position” outside the U.S.