Comeback in ’03 Seen for Ad Industry

The hard-hit advertising industry is expected to make a comeback next year, driven by a rebound in the U.S. market, but there will be no sudden global recovery, two leading forecasters said Monday.

After one of the worst downturns on record, ZenithOptimedia said, the advertising industry had hit bottom, and global spending on major media was expected to climb 2.9% next year, with spending in the United States set to rise 1.9%.

Universal McCann’s forecasting guru, Robert Coen, was even more optimistic, saying he expected U.S. advertising spending to grow 5% next year to $249 billion, bumping worldwide advertising spending 4.9% higher to $470 billion.

“Continued modest improvement is now expected for U.S. and worldwide advertising in 2003.... The shakeout in high-tech, financial and dot-com spending has been a drag in 2001 and into 2002, but the worst appears to be over,” Coen said at the UBS Warburg media conference in New York.

Nevertheless, ZenithOptimedia said the industry would have to wait until 2004 for a more sustained recovery, when it expects spending to rise 4.4% as Europe kicks back in with a 4.6% rebound.

The advertising industry has shown tentative signs of life this year after what many executives describe as the worst slump since the Great Depression.

U.S. broadcasters have been the most upbeat, reporting a significant resurgence in advertising.

But analysts caution that many risks remain, including a possible war with Iraq, weak European markets and the fact that a recovery has been restricted to a few sectors such as automobiles and political advertising.

Though the United States market, which accounts for nearly half of global advertising spending, will lead the recovery, the U.S. presidential elections and the Athens Olympics in 2004 are expected to cement the rebound in 2004.