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International: Two forecasts upbeat about 2005 ad spend

11-December-2004
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International: Two forecasts upbeat about 2005 ad spend

Predictions for advertising spending next year from two leading industry forecasters are surprisingly upbeat, as they project gains will be made even after the strong growth anticipated for 2004.

The unexpectedly optimistic predictions were offered by senior executives of two media agencies, Robert J Coen of Universal McCann and Steve King of the ZenithOptimedia Group. In raising estimates they made previously for worldwide ad spending in 2005, they cited reasons that ranged from a continuing boom in online advertising to the growing list of major marketers planning to substantially increase budgets to generate demand for aging or moribund brands.

The forecasts represent potential good news for Madison Avenue, which is worried that the robust growth it is enjoying this year may dissipate amid wavering consumer confidence and rising energy prices. Plus, next year will not bring a reprise of the additional billions of dollars spent in 2004 on elections or ads for the Olympics.

But the battles for consumer favour in crowded categories like drugs, automobiles, entertainment, telecommunications and packaged foods will generate sufficient additional growth, the forecasters said, to make 2005 the fourth consecutive year of year-over-year increases since the 6.5% decline in 2001, the first since 1991.

“Momentum will carry over into 2005,” said Mr Coen because major marketers will find it difficult “to turn around and cut ad budgets when competition is heating up.”

Mr Coen and Mr King made their forecasts at the opening session of the 32nd annual Media Week conference in Manhattan, which is sponsored by UBS.

Not everyone, of course, agreed with the rosy predictions. In separate presentations at the conference, the chief executives of two large agency companies—David A Bell of the Interpublic Group of Cos. and Sir Martin Sorrell of the WPP Group — expressed caution in forecasting growth.

Source: NY Times

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