“We don’t think there will be a recession, but it seems to be remotely possible,” said Robert J. Coen, senior VP-director of forecasting for Universal McCann, a media agency, at the UBS Media & Communications Conference Monday in New York.
Steve King, CEO of London-based ZenithOptimedia, said, “Unlike in the periods leading up to the last two ad recessions, advertisers have not been increasing their budgets faster than warranted by economic growth.” He said in the last few years, ad spending has roughly tracked the economy, remaining 0.92% to 0.93% of GDP, whereas before the last two ad recessions, that proportion increased rapidly and peaked at 1.08% in 1989 and 1.06% in 2000.
U.S. advertising is expected to grow 3.7% to $294.4 billion in 2008, and worldwide, advertising is expected to rise 4.6% to $653.9 billion, Coen said.
“Economies of most of the biggest, most important markets are doing a little bit better than the U.S.,” he said.
ZenithOptimedia predicts global ad spending will grow 6.7% to $485.5 billion next year. In the U.S., King predicted a 4.1% increase to $194.9 billion in ad spending next year.
Important drivers of ad spending in 2008 will be the Summer Olympics, U.S. presidential elections and European football championship.