December 8, 2014 / 12:04 AM / 3 years ago

Zenith again cuts global advertising spend forecasts

LONDON, Dec 8 (Reuters) - Zenith Optimedia, a leading forecaster of global advertising trends, has cut its expectations for growth in ad spending this year and next for the second time in three months, due to economic weakness in Japan, the euro zone and Russia.

Zenith, owned by advertising agency Publicis, had downgraded its forecasts in September and cut them again on Monday, seeing global advertising expenditure increase 5.1 percent in 2014 and 4.9 percent the year after.

The forecasts, based on media buying and planning trends detected by the company's local offices or affiliates, compare with September's downgraded expectations of 5.3 percent increases in both years.

Zenith said advertisers in the big European markets of France, Italy and Germany were holding back on spending, while the fall in the oil price had exacerbated the impact of the conflict in Ukraine.

Ad spend in the Russian market was forecast to grow just 1.8 percent this year, following many years of double-digit increases, while in Ukraine conditions had worsened even more.

"The crisis has unsurprisingly had a much greater effect in Ukraine, where violence has disrupted distribution chains and frightened away foreign investors, including big advertisers," it said. "We expect ad spend in Ukraine to fall 49 percent this year."

Advertising via mobile phones is the main driver of global growth and this is forecast to continue. While a lot of conventional display ads do not work well on mobile sites, Zenith said social media had succeeded in adapting offerings, including adverts, for mobile consumption. (Reporting by Kate Holton; Editing by David Holmes)

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