By Paul Thomasch and Michele Gershberg
NEW YORK (Reuters) - Media buyer GroupM is cutting its growth forecast for 12-month U.S. advertising spending to a range of 3.7 percent to 3.8 percent due to economic concerns arising from the housing crisis.
GroupM, a unit of WPP Group Plc (WPP.L: Quote, Profile, Research, Stock Buzz), had expected ad spending growth at 4.2 percent for the 12 months to September 2008, which corresponds to the U.S. broadcast television season. That compared with 4.5 percent growth in the same time frame the year before.
"If we have a consumer spending slowdown because of the credit crunch, because of an increase in unemployment rates or whatever, there will be an impact, I believe, in terms of advertising growth," Rino Scanzoni, GroupM's chief investment officer for North America, told the Reuters Media Summit on Thursday.
The division includes media agencies MindShare, Mediaedge:cia and Mediacom.
The effects of a deteriorating U.S. housing market on banks and other financial services could hurt print media buying in particular. In general, a downturn could put a pinch on experimental ad formats that do not yet have a clear way of measuring consumer responses, he said.
"I think what advertisers do, what corporations do, is they always invest in the tried and true. Some of the experimental areas would probably be more impacted than some of the traditional areas," Scanzoni said.
Two examples of experimental media that could be hurt, he said, were video-on-demand advertising and mobile advertising.
At the same time, Web search advertising and other marketing more closely tied to transactions should be able to better weather a downturn, he said. Continued...
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