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The outlook for 2001

The European advertising industry has undergone a period of rapid expansion recently. Overall growth in adspend across all media in the EU was 10% in real terms in 1999, driven by favourable economic conditions and huge advertising investment by new dotcom companies seeking to build brand awareness. Most of the economies of Europe were hit by increased oil prices in the second half of 2000, which has contributed towards higher inflation in countries throughout the world. But crude oil prices have fallen back again and are currently forecast by the IMP to decline further to an average price of $23 per barrel in 2001. It is not thought that this will have a huge impact upon economic growth in Europe except in the very short term, and the effect on advertising expenditure growth is also expected to be minimal. Figures for 2000 are expected to show another year of significant growth in the EU of 7.8% in real terms. This is a slower pace than that of 1999, and the slowdown is expected to continue into the current year, for which 4. 9% growth has been forecast. The fastest growing markets within the EU in 2000, according to the most recent estimates, were Portugal, Ireland, Italy, Austria and Belgium, all of which registered real-term growth rates of over 10%. Portugal in particular is thought to have grown by around 16%. The EU markets with the slowest growth are likely to be the Scandinavian markets of Denmark, Finland and Sweden. Similarly, the Norwegian market has grown by only around 3%. Growth is expected to be spread evenly across the main media in 2001 (Figure 1), with a sharp slowdown in the rate of growth of cinema adspend. The fastest-growing media are expected to be radio and outdoor, both relatively small markets within the total EU