Zenith Optimedia Group updated its forecast to project a 1.2% drop in U.S. ad spending and a drop of 0.5% for worldwide major media spending. That's a slight improvement in the U.S. from 2002 drops of 1.5% and 1.8% projected in December and April, respectively.
But Zenith reduced the global estimate from a growth rate of 0.8% projected last December. Zenith, owned by Publicis Groupe and Cordiant Communications Group, issues a full forecast twice a year and updates projections for the top seven markets worldwide between forecasts.
The Jack Myers Report, meanwhile, projects U.S. media spending will be flat with last year's depressed levels. That's up from the -2.0% and -0.4% forecasts Mr. Myers made in December and April, respectively. The media analyst now projects 5% declines for magazines and newspapers and 1% to 4% increases for all other major media.
A third forecaster, Taylor Nelson Sofres' CMR, expects U.S. spending to increase 2.5% this year (see story, P. 22).
Jonathan Barnard, Zenith's knowledge management manager, said Zenith's projected U.S. spending drop is more a factor of pricing flexibility-with advertisers able to negotiate better media rates-than of lesser demand. Mr. Barnard said the U.S. has shown "patchy promising signs in early 2002."
Zenith expects TV to increase 2.2% and radio to rise 1.5%. Magazines are expected to drop 8%, with newspapers falling 4%.
Beyond the U.S., Europe faces a similar pattern, with a drop of 0.7% as the European economies remain in recession. Europe slid into recession after the U.S. did and will emerge later, Mr. Barnard warned.
Meanwhile, Zenith projects Asia Pacific will show 1.7% year-over-year growth, hurt by Japan's recession. Another region affected disproportionately by one market-ailing Argentina-is Latin America, expected to fall 6.9% in 2002 but grow 8.2% in 2003.
Zenith projects global spending will remain below 2000's total until 2004. Spending on major media-newspapers, magazines, TV, radio, cinema, outdoor-will drop in 2002 to $302 billion from $303.6 billion in 2001 but grow to $311.6 billion in 2003.
That's still lower than the $315.6 billion spent in 2000, but the $326.9 billion in spending projected in 2004 would put ad spending back in record territory.
"2000 was such a great year," Mr. Barnard said. "It will take time to get up to those levels."