Zenith Media is forecasting 2001 ad spend growth of nearly 10% in Latin America and more than 6% in Europe and Asia, compared to 4.7% in North America. Although still healthy, those estimates are lower than the regional growth figures from 2000.
"World trade is slowing down," said Adam Smith, Zenith Media's head of knowledge management and compiler of its twice-yearly ad forecast. "[Last year] was a remarkable year. It's inconceivable to have an acceleration from that point, with the extraordinary state of the U.S. economy and dot-com lunacy [in 2000]."
In Europe, spending by telecommunications, high-tech, finance and travel advertisers is expected to remain buoyant. For example, Finland's Nokia, the world's biggest cellular phone maker, will continue to pour an estimated $200 million a year into advertising as millions of European cell phone users are expected to upgrade to Internet-enabled phones this year. Already, 45% of Europeans carry a cell phone, compared with 31% of Americans, according to research company Dataquest.
"It's more a question of using the same resources in a different way [to prepare for 2002] when [third-generation] mobile phones are going to take off," said Anssi Vanjoki, executive VP for Nokia Mobile Phones in Helsinki.
Outside the U.S., ad-spending growth last year owed less to the dot-coms. Zenith estimates just one-third of the ad growth in Europe in 2000 was fueled by dot-com businesses, compared with one-half in the U.S., Mr. Smith said.
And online ad spending-which slowed in the U.S. in the third quarter, according to the Internet Advertising Bureau-is still growing fast internationally as business-to-business advertising takes off. Online advertisers will spend $1.5 billion this year in Europe, compared with $906 million in 2000, according to Jupiter Media Metrix.
"Even if the economy gets tougher, information technology manufacturers say they are selling a lot of servers and software," said Olivier Fleurot, the Financial Times' managing director in London. "The companies that survived [the dot-com crash] still need to find ways to be more efficient. When you talk to the CEO of a bank, he knows that managing a bank online costs him one-tenth what it costs the traditional way."
European ad spending this year also will be propelled by the desperate need to familiarize European consumers with the euro, used by banks for transactions the last two years but only scheduled to start circulating as currency in January 2002.
Publicis, for example, is handling both an $80 million euro education account for the European Central Bank and separate national campaigns in France, Germany and the Netherlands. The French account alone is worth $40 million.
In Asia, prospects are mixed. Former high-growth countries like Thailand and the Philippines have never fully recovered from the Asian economic crisis of the late 1990s. And the world's second-biggest ad market, Japan, is only forecast to grow by a negligible 1%.
Even Asia's double-digit growth markets are slowing down, according to Zenith.
Ad spending in Indonesia is expected to grow 24% this year, but that's down from 49% in 2000. Similarly, South Korea's ad spending growth is projected to slow to 18%, from 26% in 2000, while India's growth rate drops to 13.2% from 17.4% last year.
In volatile Latin America, Mexico's forecast of 22.5% ad growth will depend on the performance of new president and former Coca-Cola executive Vicente Fox in a country that previously was run by the state-controlled party for 70 years.
Brazil, generally responsible for about half of multinational marketers' sales and profits in Latin America, is prone to phenomenal leaps and equally spectacular crashes. Lavish year-end holiday parties that for some ad agencies ran to three-day retreats at exotic beach resorts capped a year of 10%-15% growth-at some agencies, growth exceeded 20%.
For 2001, a more sedate 10% growth rate is forecast in Brazil, although major categories such as telecommunications, banking and cars are booming.
A total ban on cigarette advertising and sponsorship approved in Brazil last month will phase out tobacco spending over the next two years. But Spain's Telefonica group will spend at least $100 million on advertising in Brazil alone in 2001. And multinational groups from banks to beer are investing $30 billion to buy local companies and pumping money into marketing.
Still, even the most optimistic ad markets are eyeing the U.S. economy nervously.
"America's influence on the rest of the world is huge," said Zenith's Mr. Smith.
Contributing: Claudia Penteado in Rio de Janeiro