GroupM Cuts Online Ads '09 Growth Estimates In Half

This story was written by David Kaplan.
While WPP's GroupM agrees precisely with rival media shop ZenithOptimedia that the world's ad spend will be down 0.2 percent next year, it is taking a significantly more bearish view when it comes to online. GroupM's dismal forecast, which will be unveiled at this morning on a panel with Zenith and Interpublic Group's Magna at UBS Global Media and Communications (PDF) conference in New York, points out that the web is the only area experiencing real growth. The media agency projects 5 percent online ad growth in '09, way down from GroupM's expectation for 16 percent gains this year.  The U.K. will mirror the U.S. with rates of 4 percent growth next year compared to 22 percent in 2008. Back in August, , GroupM had forecast U.S. online ad spend to rise 14.7 percent this year. GroupM's downward revision follows eMarketers' downgraded forecast for online ads in '09 last month, saying it now believes spending will grow only 8.9 percent, compared to the 14.5 percent increase it saw in August.

Worldwide, internet ad growth is predicted to slow from 22 percent in 2008 to 10 percent in '09, representing $5 billion growth to reach $59 billion or 13 percent of measured media investment, GroupM Futures Director Adam Smith said in a statement. "We do not expect an ad collapse in 2009, but nor do we expect the sudden improvement of the last two cycles," Smith said, adding that lower gas prices and other costs associated with materials, potentially freeing up more marketing dollars. At least that's the hope.

We'll have coverage of the panel, including Magna's ad spend predictions, later this morning from the UBS MediaWeek conference.

By David Kaplan