I want to make sure everyone saw that Zenith Optimedia reduced its forecast for 2008 US advertising growth. Zenith presents its year ahead forecast each December at the UBS Media and Communications Conference. I attend that conference most years and have always been impressed by the Zenith presentation.
The new forecast calls for a gain of 3.4%, down from its revised forecast of 3.7% in March. Zenith is seeing no slowdown in online ads which suggests that all of the reduction is in traditional media. In fact, excluding online, traditional media advertising is now projected to come in around flat. Zenith noted that auto, real estate, and financial continue to be weak but other typically more resilient categories are beginning to weaken Nevertheless, according to the article in the Wall Street Journal, Zenith is not seeing an abrupt slowdown, rather a spokesman characterized the situation as “a slow leaking balloon.”
In an interesting twist, despite the drop in its forecast for the US, the world’s largest ad market, Zenith actually revised its 2008 global forecast very slightly upward to 6.6% from 6.5%. Strength in developing markets like China and Russia were noted. Also supporting growth is Central and Eastern Europe where Zenith is forecasting 17% growth this year.