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PARIS, (Reuters): Global advertising spending is set to grow by 4.3% to $502 billion this year, a slightly slower rate than previously predicted, dragged down by Europe’s ongoing debt crisis, according to market research group Zenith Optimedia.
The forecasting group, which is part of advertising group Publicis, left its forecasts for 2013 and 2014 unchanged. It had previously seen growth this year of 4.8%.
“The ad market slowed in April and May as advertisers became more cautious about the state of the global economy,” Zenith Optimedia said in a statement on Tuesday.
“The Greek elections have revived fears of a euro zone breakup. ... Economic growth has slowed across the developed world and recessions have deepened in Southern Europe.”
As a result, ad spending will actually shrink by 1.1 per cent in the 17 member states of the euro zone this year, with Spain, Italy, Greece and Portugal being hit the hardest.
The effects of Europe’s woes are being felt even in fast-growing emerging markets of Asia and Latin America.
Zenith Optimedia scaled back its growth forecasts for Asia to 6.7 per cent from 7.4 per cent in March, and it now sees growth in Latin America of 7.8 per cent, instead of 9.2 per cent.
Only North America is proving more resistant, with Zenith maintaining its forecast for 3.6 per cent growth this year.
Ad spending by big companies will get a boost this year from big events such as the London Olympics, the Euro 2012 football championships, and the U.S. presidential elections. The events are expected to add $6.3 billion to the global ad market, concentrated from June to November.
Ad spending generally tracks economic growth, so convulsions to the world markets tend to hit the shares of advertising agencies, including market leader WPP, Omnicom, Interpublic Group and Publicis.
