Advertising also starting to fade

By Tim Mullaney  |   2008-12-9  |     NEWSPAPER EDITION

THE deepening US recession will cause worldwide advertising spending to shrink next year for the first time since 2001, said ZenithOptimedia, the London-based agency that advises companies on ad purchases.

Ad spending will slip 0.2 percent to US$490.5 billion in 2009, led by a 6.2-percent drop in the US, Zenith, a unit of France's Publicis Groupe, said, Bloomberg News reported. In October, Zenith predicted the market would expand 4 percent in 2009, down from the 6-percent growth it forecast in June.

Falling projections reflect the toll the financial crisis has taken on consumer confidence, Zenith said. The Conference Board's index of consumer confidence has fallen to levels not seen since the 1970s, and companies including General Motors Corp slashed ad spending to help counter a plunge in sales.

Robert Coen at the Interpublic Group of Cos Magna unit will also probably predict a decline in 2009 ad spending, an insider with the unit said.

On December 5, Merrill Lynch predicted US ad spending would fall 4.2 percent this year and 5 percent in 2009. Global spending will grow 0.4 percent this year and decrease 1.6 percent next year, Merrill analyst Sara Gubins wrote. A 15-percent drop in auto spending next year is the major culprit, she said.