Barclays Lowers Global Ad Forecast, Sees Digital Growth

The economic uncertainty in Europe is beginning to affect ad spending. Earlier this year, Zenithoptimedia had revised its projections down to a 4.8% predicted global increase in ad spending, based partly on the outlook for the European Economic Union. But as the tenuous situation drags on in Greece and Spain, some analysts are downgrading their expectations further.

This is true at Barclays Capital which issued a revised forecast last week. The financial services firm is looking for a 3.5% increase for the rest of 2012 instead of its earlier 4.0% projected global spending rise. As a result, total spending in advertising will reach $490 billion by year-​end. Barclays’ caution has extended into next year as well. For 2013, the firm’s analysts see a 4% growth rate which is 0.5% lower than previous projections. The concern for next year appears to be China, where authorities are limiting TV airtime.

For the U.S., analysts expect a 4.6% increase this year and a 2.3% increase next year. This year’s U.S. ad growth is being fueled by politics and the Olympics.

Barclays analysts continue to believe that online advertising will be a growth vehicle for the media sector. The percentage of ad spending allocated to digital is far lower than the time spent online by the average consumer. Until those numbers balance out, the online ad growth rate will outpace other formats.

[Source: Barclays lowers global ad forecast. 12 Jun. 2012. Web. 22 Jun. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.