Zenith: Ad recovery not a certainty

Jul 8, 2002  •  Post A Comment

No certainty of recovery yet. That’s the conclusion of The Zenith Optimedia Group’s midyear advertising spending forecast for 2002.
Like the recent CMR report (see story above), Zenith’s forecast takes note of the recent strong upfront for the broadcast networks but finds scant comfort in it for the immediate future.
“We do think the majority of that billion dollars [that the networks took in this year over 2001’s upfront total] was money held out for scatter last year and is now in the upfront this year,” said Rich Hamilton, CEO, The Zenith Optimedia Group, the Americas. “The fact that that money is in the upfront this year is encouraging from the standpoint of advertiser attitude and perspective about the next 12 months, because last year at this time more advertisers were not prepared to make those commitments.
“But does it signal a significant uptick in ad spend in 2002 vs. 2001? No.”
Advertising categories that moved from scatter to the upfront this year included domestic autos and the movies, said Peggy Green, president of national broadcast, Zenith Media Services. This year’s increased broadcast-network upfront dollars were a “combination of three things,” she said. “New advertisers moving to upfront, dollars coming out of the [recent] Olympics and going into prime time and increased budgets from sustaining advertisers.”
Zenith has revised its overall 2002 U.S. ad-spend forecast slightly upward. In April 2002, Zenith predicted that U.S. advertising spending would decline by 1.8 percent in current dollars (which includes inflation). Now Zenith believes U.S. ad spending will decline by 1.2 percent this year. Global ad spending will decline by 0.5 percent this year, according to Zenith’s forecast.
Zenith also reported today that advertising spending in the United States declined 6.1 percent in 2001. The decline was 3.8 percent in a global basis.
Gross advertising billings for the first quarter, compared with the same quarter last year, were up 0.2 percent in the U.S., according to Zenith. Billings in Germany, the United Kingdom, Spain, France, Italy and Japan were all down for the quarter, from -0.7 percent (France) to -6.0 percent (Japan).