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GroupM forecasts global ad spending recovery to begin in 2010

8 December, 2009

Revised Report Predicts 6.6 Percent Fall in 2009, Modest 0.8 Percent Increase in 2010

Global advertising spending in measured media is expected to drop 6.6 percent to $445 billion in 2009 with a mild growth of 0.8 percent now expected in 2010 to $448 billion, revised up from a 1.4 percent fall in the previous 70-country forecast report from GroupM.

The so-called BRIIC nations (Brazil, Russia, India, Indonesia and China) are expected to lead the recovery while ad spending in the U.S. and Western Europe will probably lag behind, according to the report.

The study, “This Year, Next Year” is part of GroupM's media and marketing forecasting series drawn from data supplied by parent company WPP's worldwide resources in advertising, public relations, market research, and specialist communications. It was released today by GroupM Futures Director Adam Smith in London and GroupM Chief Investment Officer Rino Scanzoni in New York.

“We expect the BRIC and Next 11 countries to underwrite ad growth with a pronounced V-shaped recovery which is already underway in China,” said Smith. “In the US and many mature economies, deleveraging and sluggish job creation will likely postpone recovery until 2011.”

Advertising expenditures in the United States are expected to fall 8.0 percent this year followed by an anticipated 4.3 percent drop in 2010, according to the report. Those figures compare to an average 8.4 percent decline in 2009 followed by a 2.8 percent drop in 2010 in the G7 nations (Canada, France, Germany, Italy, Japan, the U.K., and the U.S.).

Smith stressed that global prospects for ad recovery in 2010 are improving.

“There are signs from around the world of confidence returning to the financial services and automotive sectors which have been hit hardest, though this has yet to translate into bigger marketing appropriations,” he said. “FMCG (Fast Moving Consumer Goods), personal care and telecommunications are widely cited to have sustained their advertising through the recession, but marketers everywhere, particularly in the U.S. and Western Europe, are looking for further savings and more value from media markets in 2010.”

GroupM’s new long-range model expects global ad revenue growth to return to annual growth in the range 6 percent-7 percent from 2011-2014, around a point ahead of expected nominal global GDP growth.

The full “This Year, Next Year” worldwide report, which contains forecast figures for 70 nations worldwide, is now available. For copies, please notify the media contacts listed below.

GroupM is the leading global media investment management operation. It serves as the parent company to WPP media agencies including MAXUS, MediaCom, Mediaedge:cia and Mindshare. Our primary purpose is to maximize the performance of WPP’s media communications agencies on behalf of our clients, our shareholders and our people by operating as a parent and collaborator in performance-enhancing activities such as trading, content creation, sports, digital, finance, proprietary tool development and other business-critical capabilities. The agencies that comprise GroupM are all global operations in their own right with leading market positions. The focus of GroupM is the intelligent application of physical and intellectual scale to benefit trading, innovation, and new communication services, to bring competitive advantage to our clients and our companies.

Adam Smith
Office: 44 (0)20 79 69 40 83

John Wolfe
Office: 212-297-7160 / Cell: 914-659-8663

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