Zenith: 2002 Spending Not as Low as Forecast

Media buyers are revising their ad-spending outlook for 2002 to reflect a market that is “less worse” than previous projections.

Last week, Zenith Optimedia Group, the media holding company owned jointly by Publicis Groupe and Cordiant Communications, up dated its forecast for 2002 to reflect signs of improvement in most areas of the U.S. ad economy. Zenith Optimedia is anticipating 2002 spending of $132 billion, down 1.8 percent from $134 billion in 2001. In December, when Zen ith Optimedia issued its previous forecast, it projected a decline of at least 3.5 percent.

“We’re experiencing declining declines,” quipped Gene DeWitt, former chairman/CEO of Optimedia U.S. and now president of the Syndicated Network Television Association, an industry trade group.

DeWitt noted that the housing market is fairly strong, which could spur spending in the consumer-goods and housewares categories.

“Given where the ad economy was five months ago, I’d say that the view shown in the Zenith report is fairly optimistic, and I’m inclined to agree with it,” said Charles Courtier, CEO of Mediaedge:cia Worldwide.

With corporate profits down, however, advertisers have been reluctant to expand ad budgets to chase consumers’ rising spending, said Rich Hamilton, Zenith Optimedia’s CEO for the Americas. “There are varying degrees of aggressiveness among advertisers in terms of increasing their ad budgets,” he said.

The report forecasts “some im prove ment” in total network and cable TV spending. As for the up front, the report predicts spending increases “in the low single digits, with strong signs of growth overall in the fourth quarter,” Hamilton said.

Still being prepared is the next ad-spending report from Bob Coen, svp and director of forecasting for Interpublic Group’s Universal McCann; that is slated for a June release. Coen has not re vised his projection that overall 2002 ad spending will rise 2.4 percent.