Hi Medroogies,
Concerning our earlier exchange ...
Message 15539819
Where you said ... <<My industry is the first to see the signs of a turnaround (media spending). While that hasn't occurred yet, things have levelled off. That's a good sign. It usually signals we've bottomed.>>
<<Overall, the economy is amazingly good condition for having gone through such a spec bubble. I'm surprised things didn't get worse faster. My industry is the first to see the signs of a turnaround (media spending). While that hasn't occurred yet, things have levelled off. That's a good sign. It usually signals we've bottomed.>>
And I said ... <<This is a serious question: Does that mean you would be concerned enough to change your outlook should events spiral down once again in your particular industry? Is there anything that can happen that would make you change your mind on your bullish outlook? What signs should we look for?
My industry sees the thinning out of intl clients' staffing in the mid-phase of on-going buy and sell projects, and I see that the blood-letting has just started.>>
Now what? Do my <<points didn't matter>> get revised :0)
Chugs, Jay
news.ft.com
QUOTE
Advertising 'heading for worst year in a decade'
By Richard Tomkins, Consumer Industries Editor
Published: July 1 2001 14:48GMT | Last Updated: July 1 2001 20:11GMT
One of the world's leading advertising forecasters will warn on Monday that global advertising is heading for its worst performance since the depths of the recession of the early 1990s.
Drastically downgrading its earlier forecasts, Zenith Media, the London-based media planning and buying agency, now says world-wide advertising is expected to grow by an "almost negligible" 1.4 per cent this year, representing a decline of 1.4 per cent after adjusting for inflation.
"Dotcom failure, falling stock indices and sudden profit pressure have shaken business confidence more than we had expected," Zenith says. As recently as April, the agency had been predicting world-wide growth of 4.8 per cent.
The latest forecast is significant because the advertising cycle typically runs ahead of the economic cycle, and the level of advertising spending is seen as an important indicator of economic trends.
Figures last week showed that consumer confidence was high on both sides of the Atlantic. But Zenith says companies are slashing their advertising budgets in response to plunging profits, caused by high labour and energy costs and the end of the technology boom.
The market worst hit by the slowdown is the US, now predicted by Zenith to see a 2 per cent decline in advertising spending this year, or 5.1 per cent after inflation.
"The US influence on advertising cannot be overstated: it is home to 43 per cent of the world's advertising spend and to most of the world's international advertisers," Zenith says. "Every other advertising market feels its influence."
The next most badly affected market is the UK, now expected to show a decline of 0.5 per cent. Separately, Zenith last weekpredicted UK spending would decline 0.8 per cent, but that figure excluded advertising on the internet.
Most other markets are expected to grow, but much less than Zenith had previously forecast. Europe is now expected to grow just 3.6 per cent, down from 5.9 per cent in April.
Television has been especially badly hit as advertisers react to last year's soaring airtime costs, and Zenith says newspapers are suffering from sharp reversals in all last year's boom sectors: finance, computers, telecommunications and dotcom.
The slowdown is particularly painful for advertising agencies and media owners because it follows a year in which world-wide advertising spending soared by 10.8 per cent, its biggest increase since 1988.
Profit warnings and job cuts are mounting in the advertising and media industries as the slowdown begins to bite. WPP, one of the world's biggest advertising groups, says it has cut about 1,000 jobs from its world-wide workforce of 52,000 since the beginning of the year, mostly in the US.
Zenith warns that the second-half bounce-back it had expected this year "is not happening", but says it is still hoping for a return to near-normal growth rates in 2002, "at least in North America and Europe".
It points out that this year's spending only looks bad compared with the exceptional spend last year, and even on the basis of its latest forecast, it will still be 12 per cent higher than in 1999.
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