Media agency ZenithOptimedia, a part of Publicis Groupe, last month announced it has downgraded its growth forecast for ad spending in North America and Europe this year from 4.4% to 3.8%. It bumped up its forecast for the rest of the world—to 11.1% from an earlier prediction of 10.9%.

The agency made its adjustments based on a number of macroeconomic factors, in particular, the credit crunch.

“The downgrade was larger in some markets than others,” said Jonathan Barnard, head of publications for London-based ZenithOptimedia. “We already knew the credit crunch would have an effect on the U.S. and the U.K., but we were still optimistic about France, Germany, Italy and Spain. It's since become clear they are not going to escape the effect of the credit crunch after all.”

ZenithOptimedia, however, remains upbeat about growth in emerging markets. “We're forecasting even faster growth in the next three years than we predicted back in December,” Barnard said.

Among the markets seeing strong growth are the Middle East and Russia, but Europe and North America are still the largest regions in terms of advertising, Barnard said.

“It's not as if a fast-growing market in China, or India or Brazil is hurting the markets in the West,” he said. “There are plenty of new companies being born, companies in India and China investing in the West, and new brands launching globally. So we're just seeing more of the effects of globalization.”

Central and Eastern Europe are expected to grow 18.3% this year, followed by Latin America (13.3%). The Africa/Middle East/ROW category is expected to grow 12.4%. (ROW stands for “rest of the world” and com- prises markets not included in other categories.) ZenithOptimedia pegs Asia-Pacific growth at 8.2% this year.

The agency has also substantially increased its forecast for Internet advertising, saying it had exceeded expectations. By 2010, Internet ad spending will reach $67 billion and account for 12.3% of the ad market, the agency predicted. M