Aug. 31, 2001
By Laurel Wentz
NEW YORK (AdAge.com) -- A pessimistic Zenith Media just made 2001 even gloomier by more than doubling its projected
Predicting doom with growing speed, Zenith's latest cuts in projected ad spending come only two months after the now-outdated 2% drop replaced the last positive forecast, made in April, for 2.4% growth in the U.S. ad industry this year.
Zenith offers scant hope for 2002, when U.S. ad spending is now forecast to grow by an imperceptible 0.1%.
Europe to see drop
Elsewhere in the world, Zenith's new outlook predicts ad spending in the five biggest European markets will fall by 1.8% this year -- Germany is expected to be the hardest-hit with a U.S.-like decline of 4% -- with some recovery next year to 2.7% growth in Europe.
Zenith attributes the increasingly dire scenario to the drop in corporate profitability among the world's largest advertisers, the end of the dot-com boom and fear of unemployment.
The U.S. network TV upfront market has led the way downward with a drop of about 14%. Overall, total TV ad spending is forecast to fall by 4% this year. Radio will be down by 7.8%, magazines by 5% and newspapers by 4%, according to Zenith. Internet advertising is forecast to grow by 10%.
Bright spot: direct mail
One of the few bright spots is direct mail, forecast by Zenith to grow by 5% this year. Zenith's quarterly update to its twice-yearly worldwide forecast covers just the U.S., the five biggest European countries and Japan, but those markets account for 75% of global advertising expenditure, according to Zenith.
"We had hopes of a return to real growth in 2002," Zenith said its quarterly update. "This will not now happen in the big markets, which we now expect will shrink 2.6% this year, and grow only 0.8% in 2002. We expect to report similar deterioration in many smaller countries in our worldwide December forecast."
Copyright August 2001, Crain Communications Inc.