GroupM predicts Global Ad Spending to Fall 4.4% in 2009.

Global advertising spending in measured media is expected to drop 4.4% to $425 billion in 2009, compared to 2008 when spending was up 3%, according to a revised, interim forecast report from GroupM.

In the US, spending in 2009 is expected to fall by almost the same amount—4.3%—in 2009 but tumble 6.8% in 2010.

The revised GroupM forecast was reported by GroupM Futures Director Adam Smith in London and GroupM Chief Investment Officer Rino Scanzoni in New York.

In December 2008, GroupM’s twice-yearly “This Year, Next Year” report predicted that measured media spending in 2009 would drop 0.2% to $458 billion globally and decline 3% in the US to $157 billion.

Smith pointed out that when adjusted for consumer price inflation (CPI), the global 4.4% drop equates to a fall in real terms of 7.0%. This contrasts with prospective global economic growth of perhaps zero this year, and follows a real fall of 1.6% in 2008 global advertising. “The 2008/2009 period is now a more serious advertising recession in scale, duration, and relative to the global economy, than the extraordinary 5.1% real-terms post-dotcom global advertising correction of 2001,” Smith said.

In the US, Scanzoni cautioned that 2010 was expected to show a more severe decline as a result of marketing budgets that were devised in the throes of the current recession. He also said the stimulus package provided by the US government is not expected to have an immediate positive impact on ad spending because it does little to drive consumer spending in the face of high unemployment, a weak housing sector, and a resurgence of commodity inflation in the short run.

“GroupM is the largest single buyer of media in the world and our figures are based on our own proprietary revenue data base across media,” Scanzoni pointed out. “Any optimism we feel about the US this year is expected to be mitigated by a further spending decrease in 2010.”

Europe and China

Western Europe faces a 6.7% fall this year (8.5% real) where Germany is so far proving the most resilient regional advertising market.

The forecast for spending in China dropped to 3.2% growth this year (a real fall of 1.1%), from the 13% we forecast in December. The decline is attributed to consumer retrenchment and a credit crunch in retail distribution, which government stimulus might alleviate.

GroupM will publish its first full forecast of 2010 ad spending in the June edition of “This Year, Next Year,” which is part of GroupM’s media and marketing forecasting series drawn from data supplied by holding company WPP’s worldwide resources in advertising, public relations, market research, and specialist communications.