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GroupM Revises 2013 Global Ad Spending Downward

Eurozone woes blamed

Photo: Getty Images

GroupM revised its global 2013 ad spending forecast down to 3.4 percent growth to $507 billion, compared to the 4.5 percent increase predicted in December.

GroupM said the revised global estimate reflects the continuing economic decline in the Eurozone, particularly in Italy, Spain, Portugal, Greece and Ireland. The company said it expects that group of countries to record an 11 percent drop in 2013 measured media. In releasing the latest forecast, GroupM Futures director Adam Smith said stabilization in that region remains “elusive”.

The Eurozone accounted for 7 percent of global advertising investment before the continent’s economic crisis and now accounts for only 3 percent although the area’s GDP has “changed little” during the same period, according to GroupM. This year, marketers in Western Europe are predicted to decrease spending by 2.4 percent, to $97 billion, compared to 2012.

In the U.S. this year, GroupM expects measured media to grow only 1.8 percent to $156 billion. China, of course, remains the world’s growth market and will generate 40 percent of net new investment. GroupM also noted there is similar support for sustained advertising growth in Russia.

Investment in digital media is predicted to account for 19 percent of measured global ad spending this year, rising to $95 billion, and in 2014 will increase 14 percent to account for a 20 percent share of overall ad budgets.

In releasing its revised forecast, GroupM said measured media ad spending in 2012 hit $490 billion, a 3.6 percent increase over 2011.

GroupM also predicts global ad spending, based on a forecast of 75 countries, to increase 5.1 percent to $533 billion in 2014. In the U.S., spending is predicted to rise 2.9 percent to $161 billion. Ad spending in Western Europe next year is expected to rise only 1.8 percent to $99 billion.

“We estimate marginal growth in advertising spending in 2014 on a comparable component basis,” said Rino Scanzoni, GroupM’s chief investment officer, North America. “However, the Sochi Winter Olympic games will add an additional 50 basis points to the growth rates with funding coming primarily from existing budgets.”
 

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