* 8,000 delegates to attend 57th festival
* Market made a strong start to the year
* European austerity measures weigh on outlook
By Cyril Altmeyer
PARIS, June 21 Advertisers are likely to strike
a cautious note at this week's Cannes festival, after making a
strong start to the year, on concern sovereign debt-fuelled
European austerity measures could hamper the rebound.
The 57th Cannes Lions event is set to bring together the
heads of the world's top ad firms, including WPP (WPP.L),
Publicis (PUBP.PA) and Interpublic (IPG.N), as well as
executives from Internet giants Facebook and Google (GOOG.O).
Some 8,000 delegates from 90 countries are expected to take
part in a week of seminars and workshops in the French seaside
Major advertising groups posted more solid organic sales
growth than expected in the first quarter of this year, thanks
to economic improvement in the United States and the dynamism of
Britain's WPP, the top ad firm by revenues, has forecast 2
percent growth this year, compared with a previous forecast for
flat like-for-like revenue.
Publicis also voiced optimism, though Chief Executive
Maurice Levy has said he was cautious about the second half of
the year because of "several clouds" such as concerns about the
debt of some European countries.
The co-head of French market research firm Ipsos (ISOS.PA)
told Reuters last week he was "cautiously realistic" and was not
raising his financial targets, despite better-than-expected
demand, as Europe remained weak. [ID:nWEA6293]
"It is likely that Europe will be this year for us the
region of the world where we make the least headway," Didier
Media research group Screen Digest said in a study last week
that the pick-up in the ad market would be limited to 5 percent
in Western Europe and that the market could even continue to
decline in Spain, Ireland and Greece.
Declining growth could also have a psychological impact on
advertisers and cause them to adopt a herd mentality.
"Lots of advertisers decided to change their budgets in the
first half because they anticipated that their competitors were
going to raise their budgets as well and they wanted to be
present at the moment when the ad market was going to start
growing again," Vincent Letang, Screen Digest's head of
advertising research, said.
"The risk of a double dip, even if it doesn't happen, is a
factor that leads us to be cautious on the second half," he
(Writing by James Regan; editing by Simon Jessop)