Global adspend bounces back

14 July 2011

PARIS: Global adspend should return to the levels recorded prior to the economic downturn this year, a new forecast has argued.

ZenithOptimedia, the media network, predicted that worldwide ad revenues will increase by 4.1% in 2011 on an annual basis (at current prices), reaching $471bn, and matching the figures attained before the financial crisis.

This marked a slowdown on the 6.3% expansion registered in 2010, primarily as a consequence of on-going fiscal pressures, instability in the Middle East, and the natural disasters which hit Japan.

"High oil prices have depressed consumer and corporate expenditure, and worries about public debt on the European periphery - particularly the threat of default in Greece - have damaged confidence in the stability of the world economy, the Eurozone in particular," its study continued.

North America is pegged to experience a 2.3% lift, delivering $165bn, but this still constituted a 0.3% downward revision on ZenithOptimedia's previous expectations, published in April.

Within this, the US should witness a 2.1% uptick, also trimmed slightly from three months ago, and the study stated it would be "several years" until the country regains the amounts secured before the recession.

"Fortunately, most of the large financial, retail and automotive spenders have returned to the marketplace," the study said.

Elsewhere, Western Europe is projected to see a 3.3% improvement, logging $106bn, while Central & Eastern Europe posts a 9% surge, on $27.7bn.

The pace of acceleration rises to 11.4% in Asia Pacific, moderating to 5.9% when Japan is incorporated in the totals.

Overall, regional figures are due to stand at $123.3bn this year, compared with $116bn over 2010 as a whole.

Latin American expenditure is anticipated to reach $33.4bn, a 6.7% expansion, demonstrating the broad-based nature of growth across key developing nations.

The exception is the Middle East and North Africa, enduring a 12.1% decline, to $4.5bn, as a result of social unrest.

By medium, television is set to attract $189bn in 2011, gaining almost $10bn year on year, and taking 40.7% of all spending.

In a continuance of a long term trend, newspaper returns will decrease by $2bn to $93.8bn, as the share attributable to press slides from 23.1% in 2009 to 20.1% in 2011.

Magazines should remain stable, at $43bn, with radio enjoying a modest improvement to $33bn, and cinema essentially flat on $2.4bn.

Outdoor ad sales are likely to rise by $1.8bn, hitting $31.7bn, while the web accrues an extra $8.5bn worldwide, receiving $72bn, a 15.5% share in all.

The outlay on web display is in line to surpass $25bn this year, with paid search yielding $35bn and classifieds generating nearly $12bn.

Looking further forward, ZenithOptimedia predicted global growth levels would exceed 5% in both 2012 and 2013, meaning revenues come in at $499bn and $527bn respectively.

By 2013, China - currently the world's third-largest ad market - will be worth $39.1bn, measured against $26.1bn during 2010.

As such, China is rapidly closing the gap on second-placed Japan, as the latter country is only set to expand by $1.1bn, to $47.4bn.

Russia will also enter the top ten biggest countries by the end of the forecast period, taking $12.8bn, as the ad sector almost doubles in dollar terms.

Other nations making significant contributions to growth include Brazil, adding $3.5bn, Indonesia, up $2.8bn, and India, on $2.6bn.

Data sourced from ZenithOptimedia; additional content by Warc staff