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GroupM revises global ad spend forecast, predicting only a 4.6% increase to $531bn

GroupM has revised its worldwide advertising spending forecast for 2014 downward, citing economic gridlock in the US and a persistent financial crisis in the Eurozone.

For 2014, the 74-country ad spend is estimated to increase by 4.6 per cent, representing $531bn, a marginal revision from the 5.1 per cent hike predicted earlier this year.

The revised forecast was made in GroupM’s biannual worldwide report, ‘This Year, Next Year,’ which also projected that 2013 worldwide ad spending in measured media would hit $508bn, a 3.3 percent increase over 2012 spending of $492bn.

For the US market, the report said advertising investment in measured media grew 1.8 percent in 2013 to $156.3bn, up from $153.5bn the previous year. For 2014, the revised forecast predicted a 2.9 per cent increase to $161bn.

“Ad spending in 2014 will enjoy a slight bump thanks to the Winter Olympics in Sochi, with spending coming mostly from existing budgets,” explained GroupM chief investment officer Rino Scanzoni. “But overall we estimate only marginal US growth on a comparable component basis.”

Looking at the 2014 predictions for digital ad spending, GroupM estimated that investment in digital media would account for 19 per cent of measured ad spending globally this year ($97bn) and 21 percent in 2014 ($110bn).

Smith noted that in 2013, as in past reports, most of digital’s share growth came at the expense of print media (newspapers and magazines). Television’s share of overall global ad spending remains stable at around 45 per cent.

Finally, ad spending in the UK throughout 2013 remained strong, with an estimated end growth of seven percent in 2013, and a predicted six per cent increase in 2014. This makes the UK the world's fourth-largest ad market (after the US, China and Japan) and the third-largest contributor to ad growth in 2013 and 2014.

Despite this, Western Europe remains in ad recession with a projected one per cent decrease in spending expected in 2013.

“Central and Eastern Europe ad spending growth remains in high single digits, thanks mainly to Russia and Turkey, bringing the whole continent of Europe to net zero ad growth for the year,” Smith said. “We predict Western Europe advertising will return to modest two per cent growth in 2014, but this depends on stability being restored to the troubled Eurozone periphery.”

The report stated that countries in that area (Italy, Spain, Greece, Ireland and Portugal) have seen ad spending contract 40 per cent from the 2007 peak, including a 10 per cent decline in 2013.

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