It’s no surprise that UK-based WARC (World Advertising Research Centre) has cuts it forecast for 2011 ad growth to 3.2 per cent from 4.6 per cent. WARC also reminds us that, at 2005 prices adjusted for inflation, this means a contraction of 0.1 per cent.
In 2011 just about everything that could go wrong with the supposedly recovering global economy has gone wrong: the Japanese tsunami, slowing growth in China, Eurozone country default fears and the current Mad Hatter’s Tea Party over the US deficit. Even Britain’s Royal Wedding which coalition government chancellor George Osborne rather unsportingly blamed for tepid UK output growth in the second quarter.
So adspend was bound to take a hit and WARC’s forecast makes all those predictions from the big marcoms companies of six per cent or so growth in their sales this year look a touch optimistic.
But might things be turning for the better?
As of this morning it looked as though US president Barack Obama (the poor bloke is going greyer by the day) had stitched together a deal with the Republicans to raise the deficit threshold and allow the US to carry on paying its bills, although the Republican Tea Party headbangers might yet succeed in scuppering things.
Stock markets in Europe anyway seemed to think it was good news, the UK FTSE Index rising nearly 90 points.
And there is also the fairly widespread realisation by politicians of all shades of opinion that fiscal retrenchment that harms growth is self-defeating. The amount you need to borrow still goes up.
So maybe the business world might be persuaded to unlock some of that cash big companies have been hoarding for the past two years. If they do the forecasters will be producing more adspend revisions.