Zenith: U.S. Ad Market Even Worse Than We Thought Three Months Ago

Zenith Optimedia dropped its U.S. ad forecast -- again -- and in the WSJ, research head Bruce Goerlich sums up why: "It's like a slow-leaking balloon. We are not seeing dramatic cuts; marketers are just being cautious."

The Publicis Groupe-owned media firm is ratcheting back back its 2008 ad forecast for the second time in three months. Zenith is now projecting 3.4% U.S. advertising growth in 2008 -- down from its last prediction of 3.7% in March and from a forecast of 4.1% in December.

What changed? Goerlich says he expected softness in automotive, real estate and financial services, but some unexpected categories, such as cosmetics, are also softening.

It's been a tough year for those in the business of making ad forecasts. Here's a rundown of some other recent downgrades:

• May 30: Lehman drops 2008 U.S. online ad forecast from 24% growth to 23%
• March 19: eMarketer cuts its 2008 online ad forecast 6%
• September 14: Oppenheimer cuts 2008 U.S. online ad estimate 26% growth to 25%

Silver lining? Zenith didn't cut its estimate for online advertising, still expecting 26.7% growth in 2008.

ZenithOptimedia Lowers Its U.S. Advertising Forecast

BY SUZANNE VRANICA

Word Count: 398  |  Companies Featured in This Article: Publicis Groupe

ZenithOptimedia is revising downward its U.S. advertising forecast as economic conditions continue to worsen.

The Publicis Groupe-owned firm is predicting that ad spending in the U.S. will increase 3.4% in 2008. That figure is down from a 3.7% forecast Zenith made in March. Zenith says it is downgrading its U.S. forecast because ad softness is expanding beyond the automotive, financial and housing sectors -- industries that have been seeing ad weakness for several quarters...