Zenith's latest forecast predicts that there will be a further decline of 0.5%, adding to last year's 3.8% fall. Zenith is predicting a better 2003, but says it will not be it until 2004 that things really start to improve.
In its April forecast, Zenith said that there will be no sign of an upturn until the fourth quarter. Its outlook then was going against other forecasts, which had painted a brighter picture with advertising picking up in the second half of 2002.
The voices of those who had been predicting an upturn in the second half are now being replaced by those who are plumping for not the second half and not even the following year, but 2004.
In May, WPP chief executive Sir Martin Sorrell began to say that he thinks the recovery will be a slow and steady climb out, rather than a sharper V, W, or U-shaped recovery. He said he saw the situation improving in 2002 and again in 2003, but that it might not be until the following year that the world economy shows strong signs of recovery.
"I think it will be a slow and steady climb out, rather than I think 2002 will be better than 2001. Then 2003 will be stronger than that, but I think you have to wait until 2004 for conditions to really strengthen. No doubt George Bush will want to go to the country with a strong economy and then you've got the Athens Olympic Games," he said.
Financial services continue to be one of the hardest hit sectors, according to Zenith, followed by media, telecoms and technology. Recruitment advertising has also been hard hit as recent reports say that the job market is now the worst it has been for almost a decade.
Zenith says that it sees the US ad market shrinking by another 1.2% this year, following last year's massive 6.1% drop. This follows a year that has seen a positive blip with income from the Olympics and from political advertising in the US, with 2002 also being an election year.
The recent network television upfront, advance sales for the new season beginning September, also boosted the US market.
"While this is clearly a positive sign of a stronger media economy, it does not guarantee the networks a healthy increase in revenues for 2003. A majority of the up-tick represents dollars held back from last year's budgets rather than organic increases in total spend, and advertisers can revoke these advance purchases during the season," Zenith said.
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