Next year looks dangerous for ad business, but CEE still growing

Next year is looking potentially worrying from the perspective of advertising growth, according to Simon Thomas, strategic systems director, EMEA at WPP-owned media buying agency and consumer research provider GroupM. However, the CEE region is looking stronger in relative terms than western Europe.

Total ad spend globally is expected by GroupM to grow by 28% to 2016, but this will mostly be in Asia, said Thomas, speaking at Informa’s Digital TV CEE conference in Prague this morning. Central and eastern Europe, which currently accounts for 4% of global spend, will grow by one percentage point by 2016, while western Europe will drop three points. Thomas said that CEE had seen strong growth up to the financial crisis of 2009 and had bounced back strongly.

The US and western Europe would see little or no growth, but CEE would see about 9% growth each year, said Thomas. He said Russia, Turkey, Poland, Ukraine and Slovenia had seen growth. Romania and Hungary were continuing to suffer, however, he said.

Growth to 2013 in Russia in TV ad spend was slowing, as was Polish and Czech TV ad spend. However, the CEE region was still seeing stronger growth than western Europe, said Thomas.

Overall, multichannel homes and broadband households across the EU were growing and EU citizens were now consuming more media. Print media was continuing to decline, with advertising spend moving to digital. Traditional print media had been hit worst by the financial crisis, said Thomas.

While 2009 saw an 11% global reduction in ad spend, Thomas said that the current crisis had not seen anything similar thanks to events including the forthcoming US presidential election and the London Olympics. However, the Eurozone debt crisis was having a strong negative impact. Thomas said that a lack of decision in the Eurozone and any further shocks could mean problems next year. Advertising forecasts are being cut significantly in a number of markets, including those hit by the Euro crisis, said Thomas.

“Advertisers are focusing on where growth is coming from and budgets are being moved around the world,” he said.