Reports: Ad spending declines expected to worsen

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New York—Two new reports provide glum forecasts of advertising expenditures through 2010.

WPP’s GroupM, the world’s largest media agency, predicted U.S. media spending would fall 4.3% this year and 6.8% next year. Three months ago GroupM predicted only a 3% drop for the U.S. this year.

The company attributed the worsening advertising environment to rising unemployment.

In a separate report, Morgan Stanley predicted that ad spending on broadcast TV will fall this year by 16.6%, to $36.8 billion, while cable TV advertising spending will drop 5.6%, to $26 billion. Local advertising is expected to be the most severely impacted; Morgan Stanley added that 30% of local advertisers see ad rates dropping this year by more than 3%.

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