An adspend recovery is on its way, but the good news is not coming from the traditional places, according to Initiative Media North America's first forecast of advertising activity around the world.
The Interpublic Group media network's report, to be issued this week, tracks 40 countries that account for 80 percent of worldwide spending. It predicts adspend will grow 4.5 percent this year, from $251 billion in 2002 to $262 billion. Initiative expects U.S. media expenditures to rise 3.5 percent to $102 billion this year.
Among the rising stars: Brazil, Argentina, Chile and Mexico, which the study reports will emerge from a bleak 2002 to notch adspend increases of between 8 to 23 percent. On the flip side, several European nations, including Portugal, Germany, Denmark and Belgium, will see adspend shrink by up to 5 percent.
Initiative's optimistic outlook is shared by one of the two other closely watched industry prognosticators, IPG's Universal McCann, which predicts a global rise of 5 percent to $470 billion. However, Publicis Groupe's Zenith Media has a less robust forecast of a 3 percent rise to $320 billion. (Initiative's dollar figures are lower than the others because its analysis covers just the top 40 markets. John Perriss, chief executive of Zenith Optimedia, analyzes major media only, while Robert Coen, director of forecasting at McCann-Erickson, looks at the whole spectrum.)
One expected finding from Initiative is that China, a $27 billion market, is likely to be the global growth engine in 2003. Ad spending there is forecast to rise by 20 percent, to $22 billion. Russia, with a much smaller ad market of $2 billion, will see adspend jump 24 percent, to $880 million, the report says.
Without China, the global market would be pushed down to a 2.9 percent growth rate, which is considered flat in real terms, the report states. Rounding out the top five in adspend growth are Argentina, up 22 percent to $610 million; Turkey, up 21 percent to $375 million; and Indonesia, up 18 percent to $1.3 billion.
In 2003, the five worst-performing ad markets are expected to be Portugal, down 5 percent to $282 million; Germany, off 2.4 percent to $7 billion; Denmark, down 0.6 percent to $246 million; Japan, off 0.4 percent to $17 billion; and Italy, down 0.1 percent to $4 billion.
Initiative contends that television will fuel global growth. Worldwide TV ad spending could amount to $134 billion, a 6.1 percent increase that will push the medium's share of advertising volume over 50 percent.
While the report predicts magazines will not recover to 2000 levels, it forecasts an improvement over last year by 2.6 percent. Perriss and Coen also predict a weak print sector.
"We thought it would be interesting to see what the roll-up of individual market forecasts might look like, given the number of offices we operate globally," said Alec Gerster, CEO of Initiative Media Worldwide.