Merrill Lynch cuts 2008 Australian ad growth forecast
By Leah McBride Mensching, Tuesday 29 January 2008 at 23:18 :: Advertising :: #1171 :: rss
Financial management and advisory company Merrill Lynch cut its forecasts for advertising growth in Australia due to a downturn in global earnings, The Australian has reported Wednesday.
The company's media analyst, Alice Bennett, cut her 2008 forecast for growth from 7 percent to 6 percent.
If the popular prediction that there will be a consumer recession in the United States this year holds true, Bennett said her ad growth forecasts would fall even more, The Australian reported.
“We estimate a 75 per cent correlation between Australian advertising growth and US corporate earnings growth,” she stated in a note, according to the report. “If this scenario eventuates, our 6 per cent ad forecast for 2008 will likely prove too aggressive given 35 to 40 per cent of Australian advertising comes from multinationals.”
Bennett stated that although many buyers and marketers in the media sector are forecasting a 7 to 8 percent ad growth this year, “we would expect many of these forecasts to be revised down over the coming months to reflect the more macro-driven concerns with the U.S. slowdown.”
She predicts local ad growth in Australia of 3 percent in her bear-case scenario, according to The Australian.
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