Global advertising spending will fall by 0.2 percent in 2009.

Leading international advertising services company ZenithOptimedia on Monday lowered its advertising spending forecasts for the second time in two months, predicting a decline of 0.2 percent next year.

ZenithOptimedia, owned by the Publicis group, last published forecasts in early October, predicting a 4 percent increase in advertising spending in 2009."It is now clear that the decline in advertising market activity is in full swing," the company stated. "Consumer and corporate confidence is severely shaken, and economic prospects are uncertain.""Due to fluctuations in the overall economy, our forecasts are marked by greater uncertainty than usual, and we prefer to provide them on a monthly rather than quarterly basis."

The company emphasizes that it now expects a decline in advertising spending in 2009 of 5.7 percent in North America and 1 percent in Western Europe, which is significantly weaker compared to the forecast from two months ago that indicated positive growth rates of 0.9 and 2.6 percent, respectively. The report states that credit problems have slowed development in some emerging markets, particularly in the Asia-Pacific region and Central and Eastern Europe."We have lowered our growth forecasts for 2009 from 5.2 to 3.2 percent for the Asia-Pacific region, and from 12.7 to just 1.5 percent for Central and Eastern Europe, due to concerns about the economic stability of markets such as Hungary, Turkey, and Ukraine."

The company predicts that the global advertising market will be "very difficult" in the first quarter of 2009, with a low probability of improvement in the second quarter, but stated that it expects the beginning of a slight recovery in the third quarter. Furthermore, it predicts global advertising spending growth of 5.5 percent in 2010 and 5.8 percent in 2011. Zenith notes that it still expects an 18 percent growth in online advertising next year, as advertisers can track results there. It also highlighted that television is performing relatively well during the downturn.

"As in the previous two periods of economic activity decline (from 1991 to 1992, and from 2001 to 2002), advertisers will continue to shift advertising spending from secondary media to television, as they are well aware of its brand-building power," the company explains."In addition to going to the cinema more often, people watch more television during a recession because it offers consumers escapism, and at a much lower cost per hour," they add at ZenithOptimedia. (H)