More optimism from Aegis as Carat forecasts increase in global ad growth

The tidal wave of optimism from media buying and market research group Aegis continues with confident noises about the company’s own growth prospects and, from biggest network Carat, an upward revision in its forecast for global ad growth.

And it seems to be working, its shares rose five per cent in London yesterday despite a bit more attention being paid by City analysts to the £37m (pre-tax), £25m (post-tax) provision against a bad debt from Spanish client Nueva Rumasa.

CEO Jerry Buhlmann said Aegis had started 2011 with “increased confidence” despite doubts in some quarters about the strength of the global recovery.

He also said that Japan, scene of the recent earthquake, tsunami and nuclear problems, only accounted for two per cent of Aegis revenues. Other big marcoms companies are much more exposed to campaign cancellations and the like. Dentsu obviously while WPP has a big operation in Japan with around 4,500 people.

Carat published an upgraded set of forecasts for global advertising spending. It expects a rise of 5.7 per cent this year, ahead of the 5.4 per cent growth recorded in media spending in 2010, raising its growth forecast for the US in 2011 from 1.7 per cent (very low) to 3.7 per cent.

Further acceleration is expected in 2012 with the London Olympics and a US presidential election expected to help boost global growth to 6.2 per cent.

Carat expects China to be the fastest-growing big media market, up 15.3 per cent this year and 11.8 per cent in 2012. Latin America and Russia are also expected to continue their advertising booms with 13 per cent growth in 2011, while Western Europe is expected to gain by just 3.5 per cent.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.