Advertising recovery strengthens

07 December 2010

LONDON: The rebound in global adspend is continuing to strengthen after the trials of the downturn, three major forecasts have suggested.

ZenithOptimedia, part of Publicis Groupe, predicted total expenditure would rise 4.9% in 2010 to $449.7bn (€339bn; £287bn), a slight improvement on the 4.8% increase outlined by the company in October.

North American revenues should reach $160.4bn, an annual uptick of 2.4%, before hitting $164.5bn in 2011, $199.2bn in 2012 and $175bn in 2013.

Western Europe was tipped to enjoy a 4.1% surge this year, on $104.2bn, $114.7bn in three years time.

Asia Pacific, excluding Japan, is pegged to surpass $100bn for the first time in 2010, as brand owners heighten their outlay by 6.3%.

The region, which houses dynamic economies like China and India, will deliver returns of $130.7bn in 2013, measured against $106bn in 2010.

Japan is due for modest growth, from $43.3bn to $45.3bn between 2010 and 2013, but China's development from $22.6bn to $34.2bn means it will overtake Germany, becoming the world's third-largest ad market.

Central and Eastern Europe should yield $29.3bn this year and $35.5bn in 2013, with Russia entering the top ten by the latter date, on $12.2bn, overhauling Italy, Australia and Canada in the process.

Latin America was anticipated to expand from $29.2bn to $36.8bn across the same timeframe, figures standing at $22.6bn and $28bn in the Middle East, Africa and other markets.

Looking ahead, ZenithOptimedia argued global revenues would jump 4.6% in 2011 to $470.4bn, and 5.2% in both 2012 and 2013, taking the industry's value to $520.8bn.

By medium, television is on course to achieve advertising sales worth $180.3bn in 2010 and $213.9bn in 2013, as this channel enhances its market share by 1.1% to 41.8%.

Conditions are also favourable for the web, as expenditure of $61.9bn in 2010 increases to $91.5bn by 2013, boosting its share from 14% to 17.9%.

By contrast, newspapers' proportion of adspend will slip by more than two percentage points to 18%, or $91.9bn, and magazines might lose 1.4% to 8.3%, equivalent to $42.3bn in 2013.

Radio is expected to gain $3.1bn as its share decreases 0.4%, while outdoor similarly accrues an additional $5.2bn but remains static on 6.7%.

Elsewhere, GroupM, WPP's media arm, estimated worldwide ad expenditure would exceed $500bn for the first time in 2011, on $502bn, improving from $474bn in 2010.

Central and Eastern Europe could witness the most rapid acceleration next year, up 11.4%, with Latin America up 10.6% and the Middle East and Africa up 10.7%.

Western European totals should expand 2.5% as North America grows 3.9%, including a 3.7% lift for the US.

The US and China will contribute at least $5bn extra to the advertising economy next year, while Canada, Russia, Indonesia, India, Brazil and Japan all add $1bn or more.

Online is set to deliver 37% of growth next year as revenues hit $82bn, compared with newspapers' $90bn, supplanting press in second position behind television in 2012.

"Internet spending may indeed already have eclipsed newspapers if one allows that measured internet ad investment does not include substantial advertiser investment in content creation, search-engine optimisation and analysis," said Adam Smith, GroupM's futures director.

Interpublic Group's MAGNA also stated media owners would generate $412bn through ad sales in 2011, building on a 6.9% improvement this year.

Over the period to 2016, MAGNA believes the sector will register a compound annual growth rate reaching 6.3% to $117bn, leapfrogging newspapers in 2013.

Mobile revenues should swell from $2.7bn in 2011 to $6.6bn in 2016, MAGNA said.

Data sourced from ZenithOptimedia, GroupM, PaidContent; additional content by Warc staff