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2011 Ad Spend Downgraded

14 Apr 2011

Political turmoil in the Middle East and Japan's earthquake have reduced an estimated US$2.4bn off this year's global ad spend but the market is expected to bounce back in 2012 according to ZenithOptimedia.

ZenithOptimedia has downgraded its global ad expenditure forecast from 4.6 per cent growth to 4.2 per cent after both events had "immediate consequences" on local markets. Local TV advertising has been cancelled in Egypt and commercial ad slots replaced with public-service announcements in Japan.

But the Publicis Group owned global media agency said while Japan's ad market is forecast to shrink 4.1 per cent this year it will recover and grow 4.6 per cent next year with Egypt following this year's 20 per cent drop with a 12.1 per cent recovery in 2012.

As reported in B&T, the agency has also increased its December forecast for 2012 from 5.2 per cent to 5.8 per cent because of the expected rebound in Japan and the Middle East and the strengthening of the Western, Central and Eastern European markets. While America is expected to dominate ad spend in 2013 ($167bn) the five developing markets of China, Russia, Brazil, India and Indonesia will follow, contributing 62 per cent of new ad dollars over the next three years.

Locally, Australia's total ad expenditure is forecast to grow by $1.4bn to $11.1bn in 2013 from $9.7bn in 2010. The group also expects the internet to replace newspapers as the world's second-largest advertising medium, behind TV, in 2013.

It said newspaper ad expenditure remained 51 per cent larger than internet expenditure in 2010, but newspaper expenditure is shrinking by 1.4 per cent a year, as circulations continue to fall in developed markets and readers migrate to the internet.

ZenithOptimedia also stated internet advertising continues to grow at "breakneck pace" and forecasted an average annual growth rate for the sector of 14.4 per cent between 2010 and 2013.

The agency expects newspaper global ad spend to fall from $95.2bn in 2010 to $91.2bn in 2013 and internet ad expenditure to increase from $63bn to $94.5bn over the same period.

Within the online sector, the report also found that display advertising has overtaken search as the main driver of internet ad growth with display expected to grow at an average of 16.4 per cent a year to 2013 compared to paid (12.8 per cent) and classified (10.2 per cent). TV is still the largest medium and the agency forecasts global TV ad spend to increase from $180.3bn in 2010 to $216bn in 2013.

The 2013 forecast sees magazines rank fourth to command $43bn in global ad spend followed by radio ($35.2bn), outdoor ($35bn) and cinema ($2.7bn).

Source: B&T


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