McCann Says Spain’s Economic Crisis is History

Global marketing firm McCann has joined the ranks of leading businesses, investors and economists confident about Spain’s economic recovery. The revival in the country’s advertising market in 2014 is a good indication of how companies’ growth expectations are improving, according to Felix Vicente, head of McCann’s operations in southern Europe. Additionally, advertising budgets at most firms in Spain are stable or increasing.

McCann has been the top advertising agency in Spain in terms of investment volumes for the last 18 years, according to sector data specialist Infoadex, so they know what they’re talking about! McCann is not the only industry player upbeat about Spain’s prospects. Media specialist Zenith says forecasts are improving each month for the advertising market.

 

 

GDP GROWTH FUELS ADS RECOVERY

Between 2007 and 2013, Spain’s advertising market volumes were halved as the industry was pummelled by the country’s severe downturn. Many media outlets in Spain closed and several thousands of journalists lost their jobs, as falling advertising revenues took their toll on companies already struggling from a consumer shift to the internet for news. In the second of half of last year, however, Spain finally emerged from recession and is now returning to growth. In September, the government raised its GDP growth forecasts for 2014 and 2015. Factors such as a strong external sector, an uptick in domestic demand and a slowdown in the rate of jobs destruction have all contributed to pulling Spain out of the doldrums and rekindle advertising investment. After three consecutive semesters of declines, advertising investment rose 2.7 percent in the first half of 2014. Television and digital advertising have led the field in recent months, according to McCann. Spain’s digital advertising spend is also expected to continue to grow over the next few years.

FOREIGN INVESTORS FUEL ADVERTISING

A survey published earlier this year by business school Esade said the majority of foreign investors intended to increase or maintain their level of investment in Spain in 2014. In June, foreign investment quadrupled. These companies are keen to advertise in order to take advantage of households’ improving purchasing power as banks slowly turn the credit tap back on and job creation gathers momentum. Some multinationals have even paid for the use of a Spanish landmarks to advertise. Their actions have sparked criticism in some quarters, but when money is tight then this kind of initiative is a win-win situation for both government and companies. UK mobile phone giant Vodafone last year paid subway company Metro de Madrid 3 million euros over three years to rename the station in the historic Puerta del Sol. It is now called Vodafone-Sol.

For more information on investing in Spain, contact corporate law firm Argali Abogados.

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