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ZenithOptimedia ad forecasts predicts lacklustre ad growth, amid weakness in key sectors

Ian Perrin

Zenith Optimedia CEO Ian Perrin

The latest ZenithOptimedia advertising forecast predicts that while the second half of the year will likely see better growth in the ad market than the first half of 2014, the next few years are likely to continue to see lacklustre growth with weakness in particular key sectors.

“Coming off the back of a flat second half of the year in 2013 ,with all of the government spending coming out of the market (post the federal election) there is some scope for growth in the next six months,” Ian Perrin, CEO of Zenith Optimedia told Mumbrella.

“The most concerning area for us is a continued lack of spend in retail, finance and FMCG. Those are the slow categories and are obviously significant and large categories and until we start to see some buoyancy back in those three areas we will see consistent stagnant growth.”

ZenithOptimedia’s latest quarterly research predicts that total advertising expenditure in 2014 will be $12.715bn, up 0.41 per cent from 2013 where it was $12.662bn.

Perrin said that the federal budget, with its proposals for significant cuts along with the ongoing debate over the Government’s sales pitch of the proposals, had damaged confidence.

“I think we are seeing the market has really slowed down in the first half of the year off the back of the budget, ” he said.

“Not just in terms of the contents of the budget but also the way it was communicated – it has had a negative impact on business and consumer confidence.

“We still see that there will be growth in the market (this year), albeit very limited growth, and that will really come from a strong second half of the year.”

Click to enlarge

Click to enlarge

The projections across various media show digital continuing to surge from $4.6bn this year to $5.7bn by 2016, largely at the expense of newspapers and magazines, which ZenithOptimedia expects to continue to decline in revenue at around 17 per cent each year.

“There has been consistency with the media numbers,” said Perrin. “We have seen digital and all components of it continue to grow while we have seen newspapers and magazines being the main channel impacted by that growth.”

Perrin predicted the TV market would also be an interesting one to watch, amid a number of subscription video on demand plays (SVOD) coming from the likes of Presto, StreamCo and Netflix, although the media agency predicts that the sector will continue to grow for the next few years.

“I think what is difficult to predict going forward is what impact online video will have on free-to-air television, what the role of subscription TV and how much revenue will fall into that category,” he said.

“That will be the interesting thing to watch in this space whether that be StreamCo etc. predicting what will happen in the TV market is the more difficult area to predict.”

Nic Christensen 

Source: ZO Click to enlarge

Source: ZO Click to enlarge

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