Carat cuts global ad-spend growth forecast

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Media communications agency Carat shrunk its global advertising-spending forecast for this year by 0.7% on August 25. The Aegis Group-owned firm dropped its 2011 global ad-expenditure forecast to $481 billion, representing growth of 5% compared with last year, because of economic and political instability and natural disasters.

North American ad spending will rise by 3.2% this year, said Carat, a 0.7 percentage-point decrease from its March forecast.

Louise Evans, group director of communications and marketing at Aegis, said the revision is a “moderation.”

“The numbers are going downwards, but it's not a big slashing, and overall the numbers are positive,” she said.

Digital will see the largest advertising growth, with Carat predicting a 13.3% spending increase this year. However, it cut that prediction by 0.3 percentage points from the firm's previous forecast.

Carat said out-of-home and TV ad spending will rise by 6.3% and 6%, respectively, but the firm reduced these forecasts by nearly a percentage point apiece.

Radio ad spending saw the biggest downgrade among Carat's channel segments, dropping 2.1 percentage points to 4% expected growth for this year. Magazine ad spending was the only segment revised into negative growth, with Carat decreasing the ad spending 0.7 percentage points to a 0.4% decline. Predicted newspaper ad spending for this year remained positive, at 0.1% growth, despite being downgraded by 0.2 percentage points.

Carat also shaved 0.2 percentage points off next year's global ad-spend forecast to expected 6% growth. The firm also downgraded its North America expectations for 2012 ad spending by 0.4 percentage points to 5.5% growth.

However, Carat improved 2012 ad spending estimates for TV, magazines, cinema and digital. Evans said Carat revised its predictions for those categories due to events taking place next year, such as the 2012 Olympic Summer Games, the US presidential election and the growing adoption of the media “in some of the fast-growing regions,” such as the Middle East.

Meanwhile, Forrester Research said in a report released this week that US interactive marketing spend will reach $76.6 billion by 2016. The research firm also predicted that digital marketing channels, such as search, display, mobile, email and social media, will combine to account for 35% of total ad spending in five years.

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