The U.S. slump is a major factor in ZenithOptimedia cutting its forecast for global ad-spending growth in 2008 to 4.3%, from 6.6% in the June forecast. No improvement is expected in 2009, downgraded to 4% from 6%.
Developing markets hold up
In other regions, Latin America is forecast to grow about 10% a year, and Asia about 6.6% this year and 5.2% next year.
Over the next few years, 65% of the worldwide growth in ad spending will come from developing markets, according to the media agency. Those markets, which ZenithOptimedia defines in its quarterly forecasts as everywhere except North America, Western Europe and Japan, will account for 32% of global ad expenditure in 2010, up from 28% in 2007. Thanks to that growth, Russia and Brazil are expected to join the world's top 10 ad markets by 2010, ranking No. 6 and No. 8 respectively, up from No. 13 and No. 11 in 2007. (Brazil and Russia, along with India and China, make up the so-called BRIC countries; China is already the No. 5 ad market.)
ZenithOptimedia noted that in a survey, conducted with Business Week, of U.S. consumers asked what they would cut if forced to reduce their overall spending, 56% of respondents said they would spend less money on luxury goods, 50% would cut back on travel and 39% on entertainment. That puts those categories deeply at risk to cut their ad budgets. Far fewer respondents said they would spend less on household goods (23%), clothing (15%) and essential basics (6%).