COEN PREDICTS SLOW AD RECOVERY

Tells Conference to Expect Slow Climb Out of Recession

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NEW YORK (AdAge.com) -- The ad recession in the U.S. may have bottomed out by the end of 2001, but it will be a slow climb back, according to two top industry forecasters.

Speaking at the annual Media Week conference sponsored by UBS Warburg, Robert J. Coen, senior vice president and director of forecasting at Interpublic Group

of Cos.' Universal McCann, New York, said the climb back will be slow despite a first quarter spurt due to the 2002 winter Olympics and upcoming mid-term elections.

Big advertisers tend to get good deals on media in slow periods and don't give those rate cuts back quickly in a recovery, he said.

Small bounce back
Mr. Coen said U.S. ad spending will ultimately drop 4.1% this year to to $233.7 billion, from $243.7 in 2000, and will climb back only 2.4% to $239.3 billion in 2002.

The speed of this downturn has been sharper than previous ad recessions, said Mr. Coen and John Perriss, chief executive of Zenith Media, London, a joint venture of Publicis Groupe and Cordiant Communications Group Worldwide.

Ad cuts follow profit loss
Mr. Perriss noted much of the ad spending cuts have followed companies' profits, which suggests the companies did not see the profit drops coming and had to react quickly.

The picture overseas is not much better than in the U.S., Mr. Perriss said. Worldwide ad spending will drop 3.4% this year, with nearly every world region dropping, he said.

"In 2001, the industry got hit all over the world ... 2002 [looks] better, but no boom," he said.

As world economies emerge from recession, spending in 2002 will grow 0.8%, Mr. Perriss said.

Global effect
This global effect is a new wrinkle to this recession, both speakers said. Usually the U.S. rolls into a recession first, followed by other world markets, but this time around, overseas economies followed the U.S. quickly, Mr. Perriss said.

He noted that in the 1990-91 recession, nine markets went into recession in 1990 and another 10 in 1991, while in 2001, 23 markets slid into recession nearly at once.

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