World leader and the largest in the advertising and marketing corporation, WPP, has decided to cut its full year growth outlook forecast after the discovery that clients have cut on spending for advertising due to the economic crisis. http://online.wsj.com/article/SB10001424052970203897404578077941669547434.html?KEYWORDS=marketing
WPP has has looked into expanding into more international markets. Currently making more than two third sales in Latin America the Middle East, Central and Eastern Europe and Asia Pacific, WPP’s goal is to increase sales by forecasting for the next three and four years. However, their forecasting hasn’t been 100% accurate recently after showing that the markets in Brazil have slowed by 1.9% in their third quarter from 3.6%, sales in North America have dropped .4% and a 2.1% decline in Europe (Bender). In August, WPP ended up changing their forecasts of high expectations to lower growth expectations that advertising needs from clients would decrease, which ended up decrease particularly in the health care, call center and public affairs market. Even in their most popular time of client expectancy was at an all time low in September.
I believe that there have been many challenges for many companies to forecast the growth rates in the market with the current economic crisis which has set many companies back. Large companies such as Fannie Mae, GMC, Bank of America and many more major corporations primarily in the financial sector have had the greatest impact.
The question is, if forecasting isn’t providing a beneficial outlook for the future of a business, what else can businesses do to try to predict their future outlook within the market place? With the economies aggregate behavior of employment, output, and prices shifting since 2008, is cutting off the full year growth outlook such as WPP has decided to do, the best option?