Global adspend set for moderate growth in 2010

09 December 2009

NEW YORK: Global adspend levels will record moderate growth next year, with Asia Pacific and Latin America among the main drivers of this trend, according to three new forecasts.

GroupM, WPP Group's media arm, expects worldwide advertising revenues to rise by 0.8% in 2010, a marked improvement on its previous estimate, of an annual decline of 1.4%.

Warc's most recent Consensus Forecast, based on a weighted average of predictions made by agencies, media companies and industry associations, suggested 2010 spending would be flat, indicating that sentiment has improved in recent times.

Adam Smith, futures director at GroupM, argued that "it feels increasingly that we are at or near an inflection point rather than the edge of a second dip."

More specifically, the organisation has predicted that North America will register a decrease of 4%, to $150 billion (€102bn; £92bn), next year, following on from a drop of 8% this year.

This rate of contraction was pegged at 12.8% for Western Europe in 2009, and 1.6% over the proceeding 12 months, to $105bn.

By contrast, Latin America will see totals climb by 7% and 10.5% this year and next respectively, with budgets reaching around $27bn overall.

Asia Pacific will also enjoy an uptick of 5.3% in 2010, having seen a minor contraction, of 0.9%, in 2009, when advertising expenditure will come in at $127bn.

Separately, ZenithOptimedia, part of Publicis Groupe, has stated that the global outlay on advertising will diminish by 10.2% in 2009.

Adam Barnard, the media network's head of publications, argued this constituted the "worst decline in ad expenditure in modern times".

More positively, the market will see a positive movement of 0.9% next year, although North America will be off by 2.4%, as will Western Europe, by 0.5%, and Japan, by 3.2%.

However, Asia Pacific, excluding Japan, will improve by 8.4%, with Latin America up 8.1%, Central and Eastern Europe by 2.3%, and Africa, the Middle East and the rest of the world by 7%.

By medium, the web will see ad sales jump by more than 10% in each of the next three years, taking its overall share to 16.2% in 2012.

The proportion of spending directed to television will also increase by around 1% between 2009 and 2012, to 40.2%, while radio will witness a marginal decline, to 7.4%, in this period.

Print media will find the going considerably more challenging, with newspapers down by 3.3%, to a 20% share, and magazines slipping by 1.4%, to 8.9%.

Looking even further forward, ZenithOptimedia foresees growth of 3.9% in 2011, and 4.8% in 2012, although these gains will not offset the losses made during the current recession.

Magna, part of Interpublic Group, employs a different methodology to calculate its forecasts, assessing media company revenues rather than rate card data, or other similar statistics.

In these terms, the global total will be $380bn next year, up by 5.9%, including a slight rise in the US, of 0.2%, to $162.7bn, after the market lost 15% of its value in 2009.

Data sourced from Wall Street Journal, ZenithOptimedia, Financial Times; additional content by Warc staff