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Opinion and Insight

Confidence in European Ad Business Decreased in Third Quarter of 2018

The EACA publishes its European Advertising Business Climate Index

Confidence in European Ad Business Decreased in Third Quarter of 2018

Business confidence in the European advertising and marketing sector decreased in the third quarter of the year, according to the latest European Advertising Business Climate Index, issued by the European Association of Communications Agencies (EACA).

The report - which you can view in full here - shows that business confidence in the ad industry in Q3/2018 remains positive but has decreased from +14 to +3 over the past two years (see Graph 1).

In Graph 2, a five-year graph illustrates developments over a longer period of time.

The most recent decline in confidence can partly be explained by the drop in the confidence index of the UK from +24.8 (Q2/2018) to -11.1 (Q3/2018). The UK has the largest share of the advertising market in Europe and therefore the highest coefficient to influence the overall index. The 35.9-point decline in the UK between the last quarters is also the largest drop in all the countries measured.

Another driver of the decline could be a further drop of confidence in Greece. It has decreased from -27.7 measured in the previous quarter to -39.7 in Q3/2018. This figure is the lowest level recorded in any country over the last three years.

Regarding expectations for advertising demand and employment, the report shows declines in all the geographic areas measured apart from the Mediterranean region, where a slight rise is expected - from -1.1 (Q2/2018) to 2.1 (Q3/2018) for demand and from -5.4 (Q2/2018) to -3.8 (Q3/2018) for employment.

The report finds that the biggest factor (52%) limiting demand for the advertising sector currently is demand. Insufficient labour forces account for 12 %.

Among all the the 24 countries measured, the confidence rose in nine countries. Among them, the biggest rises are in Spain (up by 12.7 points) and Malta (up by 12.5 points). Compared to the previous report, Slovenia continues as the country with the highest level of confidence (+26.9), followed by Sweden (+25.9) and Germany (+23.8). These three countries have reported relatively high, stable and positive levels already for several years.

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