Portugal Advertising Sales Set for Third Consecutive Drop

Advertising sales in Portugal are set to decline a third consecutive year after falling an estimated 18 percent in 2012 amid the country’s recession, according to Omnicom Group Inc.

Industry sales last year dropped to 508 million euros ($655 million), the lowest level since 1997, from 618 million euros in 2011, Luis Mergulhao, head of the advertising company’s Portuguese unit, said in an e-mailed statement.

Portugal’s government forecast on March 15 that the economy will shrink 2.3 percent this year before growing 0.6 percent next year. The jobless rate will climb to 18.2 percent in 2013 and 18.5 percent in 2014, it said. The drop in gross domestic product last year accelerated to 3.2 percent from a 1.6 percent contraction in 2011.

“Family and company confidence levels have continued to deteriorate,” Mergulhao said in the statement from his Lisbon office. “Still, 2013 advertising sales will fall less than in previous years.”

Free-to-air television, which includes Impresa SGPS SA’s SIC channel, the TVI channel owned by Media Capital SGPS SA and state-owned broadcasters RTP1 and RTP2, widened their share of industry revenue to 49.2 percent last year from 48.4 in 2011, he said.

Impresa, Portugal’s second-biggest media company by revenue, said today that the “extremely adverse” economic environment will continue in 2013. Impresa reported that its full-year net loss narrowed to 4.9 million euros in 2012 from 35.1 million euros in 2011. Revenue declined 8.3 percent to 229 million euros.

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