GroupM Cuts Global Ad Forecast, Sees Video Robbing TV In Some Countries

adam-smithGroupM has lowered its global ad spending forecast for the second year running.

The media investment arm of WPP cited Eurozone weakness as the main reason why it expects 2013 ad growth of 3.4%, instead of the 4.5% it previously predicted. Argentine currency volatility, a wobbly Japan and Egypt’s chaos were secondary reasons.

The five countries hit hardest by Europe’s economic troubles – Italy, Spain, Greece, Ireland and Portugal – made up 7% of global ad spending, precrisis. Now that share is around 3%. There is also a downward trend in northern Europe, including the Nordic countries.

Digital is only moderately affected, if at all. It is consistently adding one point of share per year – 18% in 2013, 19% in 2014. The arrival of digital video is a recurring trend in country after country.

“The two leading themes of this report are online video’s encroachment of linear TV, and, unsurprisingly, the unrelenting pressure on press [print] media,” wrote report author Adam Smith, GroupM Futures Director.

The increasing availability of online video ads in larger, brand-friendlier formats played out in a range of countries, including Latvia, Denmark and Vietnam. In Malaysia, some larger advertisers are shifting TV budgets to digital video.

In an ominous sign, GroupM has not yet seen the anticipated ad demand around the 2014 soccer World Cup in Brazil or the winter Olympics in Russia.

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