Emerging economies to the rescue of the advertising market
June 28, 2010 – 4:05 amSimple relay of growth, emerging markets are fast becoming the spare wheel of the advertising industry, facing down a Europe and an American market that is likely to slow in 2011.
Masters in Communication in essence, advertisers together at the festival "Cannes Lions" last week wanted to make a final disposition at the end of "emerging" to describe those countries with ZenithOptimedia estimated growth at 8.5% for 2010 in a market projected global increase of 2.2%.
Maurice Levy, head of Publicis, even likes to call "overwhelm" the markets, with digital, should represent 60% of his income in three to four years against about half currently.
In this category, enter the BRIC (Brazil, Russia, India, China) and the 11 following (such as Indonesia, Turkey and Egypt) that the potential for economic growth and accelerated access of populations to make technological equipment particularly attractive to advertisers.
"Our customers are increasingly focused on these markets, even small, but growing very rapidly," he told Reuters Martin Sorrell, boss of WPP global leader.
Using a football analogy, he said that these countries were now the first division, ahead of North America and Western Europe.
"The poor old Western Europe, whatever happens, will see sluggish growth or even stagnation in the medium term," he said.
EUROPE AT THE DRAG, THE CONCERNS ABOUT U.S.
Entangled in its problems of debt and its attendant austerity plans harmful consumption, Europe loses some of its finery in the eyes of advertisers.
"Europe continues to lag behind.Us were not counting on a clear recovery in Europe this year, "he told Reuters Michael Roth, CEO of the American Interpublic.
Although the situation in Europe does not induce further change in the behavior of advertisers, Maurice Levy told Reuters that the content of school social life, particularly in France on the issue of pensions, would be essential.
William Eccleshare, head of the world's leading outdoor advertising company, Clear Channel Outdoor, told Reuters that the European situation made him uneasy and feared cuts in budgets in the second half.
For Martin Sorrell, advertisers could at least be more careful in preparing their budgets in 2011 when they were last year full of hope for recovery.
The wait could be even more fitting that North America, including the surprising rebound boosts the market since the beginning of the year, may suffer headwinds in 2011.
Martin Sorrell said that the prospect of a tax on profits earned by U.S. firms abroad worried some of its customers.
Barclays Capital, in a recent note, underlined that the recovery in U.S. advertising in 2010 led by the automotive sector, the Vancouver Olympics and midterm elections should give way to a "marked slowdown" next year.
AFRICA, THE NEXT FIELD OF PLAY OF THE PUB
This is why advertisers redoubled their efforts in high growth countries, like Publicis, which intends to spend a higher gear with an investment plan in China scheduled for September.
Behind these engines of growth, Africa is emerging as the new emerging market for global advertising, said David Jones, CEO of Havas Worldwide.
"During the coming decade, we will begin to Africa be recognized as the new Asia, the new land of opportunities," he told Reuters on Tuesday.
From its base in South Africa, Havas Worldwide particular take into account the strong presence on the continent of the Bollore Group, whose chairman Vincent Bollore, Havas also runs which is the main shareholder.
While telcos rush in Africa where people adopt mobile without using the fixed Diageo already sees Nigeria as one of its major markets for Guinness beer.
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