Effects of global advertising slide not clear here till 2002

The effects of the global advertising downturn won't be seen in Ireland until next year, although agencies should get some indication of how the slowdown will affect them when clients put together their budgets for 2002.

This will happen during the next three months, although there is a feeling that while budgets won't grow, they won't be cut either.

Current indications are that when the figures are calculated at the end of the year , Irish advertising will have shown a growth of 7 to 8 per cent, indicating that for 2001 the industry here is out of step, in a positive way, with the rest of the world.

Since the second quarter of the year, forecasters have been predicting an ever-accelerating slowdown in global advertising spend. In the past week, Zenith Media, the global media group, forecast a 4.7 per cent real-terms decline in spending this year.

Britain, it suggested, is expected to show a 4.1 per cent drop this year, be flat in 2002 and show a small recovery of 1.2 per cent in 2003. The US, according to Zenith, will experience a 7.2 per cent drop this year and a 2.3 per cent fall in 2002, followed by a smaller decline in 2003.

Assumptions that Ireland is on the same sloping curve would be wrong, according to Mr Shay Keany, chief executive of Zenith in Ireland. Ireland is too small a market to be included in Zenith's global forecast, but he says there has been no downturn in spend this year.

He does, however, acknowledge that there has been a fall-off in some niche advertising areas, particularly newspaper recruitment advertising, which began to fall off in the second quarter, and property - which is now showing signs of slacking off.

Zenith spends £20 million (€25.4 million) per annum buying media in Ireland for clients such as Burger King and Pepsi Cola.

"Budgets are difficult to predict," says Mr Keany, "but I would expect next year's to be on par with this year's - that clients will maintain the status quo."

Mr Paul Moran, managing director of MediaWorks, is equally optimistic.

Advertising here has not experienced the same downturn as in other markets because, for example, "we weren't as reliant on dot.com advertising", he says, "and in any case, in Ireland, we're just playing catch-up in terms of the relationship between advertising and GNP".

Mr Liam McDonnell, chief executive of AIM/Carat, agrees with this catch-up theory.

"As an economy, we have been under-advertised for years," he points out, "so advertising here will continue to grow in many ways despite what happens elsewhere."

Bucking the trend so evident in other economies, the figures for the first six months of this year show that advertising spend was up across all media - and by as much as 12 per cent on newspaper advertising.

"The industry here is maturing," says Mr Moran. "While, for example, RT╔ will announce that their revenues are down, it's not because the money has disappeared from advertisers' budgets - it's simply that the money is being distributed across a greater number of media suppliers."

In 2000, Irish advertising spend grew by 25 per cent to £600 million - a phenomenal growth unlikely to be seen again.

However, this year's figure of 7 - 8 per cent indicates a more realistic and measured growth here which, to date, shows few signs of following the global advertising slowdown.

bharrison@irish-times.ie