Art & Commerce




High Point According to Advertising Expenditure Forecasts, a new report by Zenith Media, 1996 may have marked the zenith of the ad-growth cycle when viewed from a planetary perspective. That presumes, of course, there is a cycle, which is another matter. With offices in 26 countries, Zenith manages most of the media activities for its corporate parents, Bates Worldwide and Saatchi & Saatchi. This gives the company an extraordinarily broad perspective. The main reasons for the deceleration in growth–despite which, according to Zenith’s recent analysis, the industry will continue to expand at least through 2000–are a relative saturation in the U.S. and the meltdown in Asia. The U.S. call is based on economics. After cost-cutting and downsizing, then a spell of revenue-enhancing initiatives, corporate profits in the U.S., which are presently at peak levels, may soon come under pressure from rising costs and renewed price competition from Asia. That may squeeze ad budgets. The economic woes in Asia have already socked ad spending there, and it may take a couple of years for the region to regain lost ground. What’s the fastest-growing mega-regional market? Latin America, now about 8 percent of global ad spending, could account for 10 percent by the millennium. –Alan Gottesman (westendal pobox.com) is principal of West End Consulting.


THE GOTTESMAN FILE

The latest projections of ad-spending growth vary widely by region, with Asia stumbling and Latin America zooming.

……….1998…..1999…..2000

…..North America…..5.6%…..5.0%…..5.0%
…..Europe…..6.1%…..5.1%…..5.1%
…..Asia/Pacific…..0.0%…..4.7%…..5.2%
…..Latin America…..10.4%…..10.7%…..11.9%
…..Other…..11.2%…..11.2%…..11.5%
…..World…..5.0%…..5.6%…..5.9%

Source: Zenith Media