GroupM Cuts 2013 Ad Spending Estimate21 Aug, 2013 By: Doug McPherson
NEW YORK – WPP’s GroupM has cut its 2013 ad spending forecast to $507 billion, a gain of 3.5 percent over 2012. Earlier, the company had predicted 4.5-percent growth for the year, but has cut that estimate because of “continued economic discord” in the Eurozone, namely Italy, Spain, Portugal and Greece.
GroupM Futures director Adam Smith said those countries in particular continue to struggle. “Stabilization is elusive. We now expect this group to record an 11-percent fall in measured advertising in 2013,” Smith said.
The company said tough economic conditions keep plaguing Western Europe and that spending there will fall another 2.4 percent this year to $97 billion. Spending growth in Central and Eastern Europe, Asia and Latin America will stay in the high-single-digit or low-double-digit range for this year and next, GroupM concluded.
Growth in the U.S. will remain mediocre compared to the worldwide outlook, with 2013 growth pegged at just 1.8 percent this year to $156 billion. Next year’s spending is predicted to grow nearly 3 percent to $161 billion.
Rino Scanzoni, chief investment officer with GroupM North America, said if the 2014 Olympic Games scheduled for Sochi, Russia, are excluded from the mix, growth next year will be “marginal.” The games will add about one-half of a percentage point to the total “with funding coming primarily from existing budgets,” Scanzoni told MediaPost.
GroupM also reports that the total 2012 ad expenditure hit $490 billion, a gain of 3.6 percent over 2011.