Adspend prospects improve

15 March 2012

PARIS: Global advertising expenditure will continue to bounce back over the next three years, a forecast from ZenithOptimedia has suggested.

The media network, part of Publicis Groupe, stated that adspend rose from $444bn in 2010 to $461bn in 2011, and predicted totals would hit $482bn in 2012, $509bn in 2013 and $539bn in 2014.

It modestly upgraded growth estimates for every year, partly as the financial situation in the eurozone has begun to stabilise, and because big brand owners like Unilever, Coca-Cola and PepsiCo have outlined plans to boost budgets.

"Companies have generally built up their cash reserves since the onset of the downturn in 2008, and are in a strong position to invest in marketing to compete for market share and stimulate consumption," the study said.

By region, North America is expected to enjoy a 3.6% expansion to $171bn in 2011. Equivalent prospects for Western Europe were downgraded, but the region should still witness a 1.5% increase to $104bn.

The outlook for Central and Eastern Europe was also less optimistic, but the area is in line to outperform the average growth rate, with a 6.5% rise to $27bn. Asia Pacific was pegged to record a 7.5% jump to $133bn, while Latin America logs a 9.2% lift to $38.9bn.

By medium, TV ad sales will rise by $10bn on an annual basis to $194bn in 2012. Internet returns are due to grow by $12bn to $88.1bn, but print will see a decline of almost $2bn, to just under $90bn.

Looking ahead, the share of the advertising market held by emerging economies is anticipated to rise from 33.2% to 37.1% in the next three years, with these countries yielding 60% of global growth.

Within this, China should contribute an additional $17.2bn to the worldwide advertising industry by 2014, standing at $4.1bn for Russia, $3.9 for Brazil, $3.8bn for Indonesia and $2.3bn for Argentina.

Similarly, the internet is anticipated to see its share improve from 16.4% in 2011 to 22.1% in 2014. By the latter date, the web could take over 30% of outlay in six markets, in the form of Canada, China, Norway, South Korea, Sweden and the UK.

More specifically, the web is set to overtake newspapers as the second-largest advertising channel by 2013. By this date, newspapers will attract $88.9bn, compared with the net's $102bn.

The challenges facing print were also confirmed by the fact that magazines will see returns drop from $43bn in 2011 to $41.7bn in 2012, but as this only relates to print, ZenithOptimedia suggested tablets, mobile and online gave room for optimism.

Data sourced from ZenithOptimedia; additional content by Warc staff