Look For Advertising Estimates To Come Down Next Week

So says Alexia Quadrani at JPMorgan who believes that when media research houses MAGNA and Zenith Media reports their results next week, they are likely to reduce their advertising forecasts again. In anticipation, she has reduced her U.S. advertising forecasts to -3% from -2% and global advertising to growth of 1.8%. Apparently, there is still growth internationally, but could that change as the rest of the world continue to play catch up with the slumping U.S. economy. I say negative international advertising growth is in the cards so watch for that in the coming months.

09 Ad Spending Estimates Should Continue to Come Down

• Next week we are likely to see negative estimate revisions on 2008/2009 ad forecasts from two major media research houses, MAGNA and Zenith Media, at an industry conference.

• We have revised our estimates as well reflecting the more challenging economic outlook, lowering our US forecast from -2% to -3%, and we are now looking for global growth of 1.8%.

• The tone next week from media companies should naturally be rather negative. However, we do not expect as much doom and gloom from the few ad agencies making comments (WPP and IPG) as we believe general organic revenue guidance for next year will likely be flat to slight down rather than suggesting steeper declines.

• Account Wins/Losses:
Omnicom won creative duties for Starbucks ($60 million in estimated billings) from incumbent Wieden & Kennedy (independent). Meanhwhile, IPG's Deutsch won The Sport Authority's $48 million media account from independent DeVito/Verdi.