Global ad spending dented by weaker British, German economies

This post was originally published on this site
© Reuters. Global ad spending dented by weaker British, German economies© Reuters. Global ad spending dented by weaker British, German economies

(Reuters) – Global advertising spending in 2019 is expected to grow lower than a previous estimate, hurt by recession fears in the United Kingdom and Germany, despite strong growth in digital ad budgets in the United States.

Industry forecaster Zenith cut its forecast to 4.4% growth from 4.6%, blaming a weaker trading globally and slowdowns in Europe and Asia. Global ad spending rose 6.7% in 2018.

With major European economies teetering on a recession, owing to trade tensions and the uncertainty around Brexit, businesses have tightened their purse strings, in turn hurting advertising budgets.

Zenith, owned by French advertising group Publicis (PA:), forecast that global ad spending will reach $640 billion this year, with a 4.3% rise in 2020 and 4.4% in 2021, down from previous forecasts of 4.4% growth in 2020 and 4.3% in 2021.

The forecaster said it would normally expect an increase in ad spending in 2020, benefiting from U.S. elections, the Summer Olympics and the UEFA Euro 2020 tournament.

“But given current political and economic uncertainty, brands are being cautious about committing to extra spending at the moment,” it added.

Zenith forecast a 0.6% decline for ad spending in Germany this year, down from a prior expectation of fall of 0.4%. It also reduced its growth forecast for the UK to 3.3% from 3.9%, its slowest rate of growth since 2011.

German industrial orders fell more than expected in August on weaker domestic demand, data showed on Monday, adding to signs that a manufacturing slump is pushing Europe’s largest economy into recession.

Expenditure on advertising in China, the world’s second biggest spender after the United States, is also slowing.

However, small and medium-sized companies advertising for the first time on Facebook Inc (O:) and Google (O:) are continuing to drive growth in the United States, where consumer spending chugs along at a steady pace.

“Small businesses in the U.S. are spending heavily on social media and paid search, and are fuelling much of the global growth of these channels,” Zenith researchers said.

The firm said ad spending on social media is expected to grow 20% in 2019, overtaking print to become the third-largest advertising channel.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.