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(June 29, 2001) -- Zenith Media is predicting a 2% drop in U.S. ad spending this year in its half-year forecast released today.

Zenith's last published outlook, in December 2000, anticipated 4.6% growth in U.S. ad spend in major media this year. Zenith later downgraded that to 2.4% in an April revision, citing a poor first quarter.

Zenith's new forecast for worldwide ad spend in 2001 is 1.4% growth. In December, Zenith had predicted 6% worldwide ad spend growth for this year, then slashed that figure to 4.8% in April.

Adam Smith, Zenith's head of knowledge management in London, said the U.S., which accounts for more than 40% of the worldwide ad market, played a big part in the downgrading.

In the U.S., Zenith forecasts that magazines will be the hardest hit, with a 4% drop in ad spend in 2001, although Zenith predicts some recovery late in the year. Total TV ad spend will be down 0.8% this year, with the biggest drop, an estimated 3%, in network television. For newspapers, Zenith forecasts that ad spend will fall by 1%.

In the rest of the world, Zenith predicts 2001 ad spend growth of 3.6% for Europe, 3.4% for Asia and 5.4% for Latin America.

In September, the company will look at whether further revisions are needed to the 2001 estimates.

"I wouldn't bet on it going up," Mr. Smith said. "Personally, I think this may be the bottom in the U.S."

And next year is looking better. Zenith predicts 5.9% growth in worldwide ad spend in 2002, with the U.S. market recovering to grow by 4.7%. -- Laurel Wentz

Copyright June 2001, Crain Communications Inc.

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