TV Faces Global Long-Term Decline, Warns Zenith

19 July 2005

ZenithOptimedia is pessimistic about long-term global prospects for TV advertising.

The Publicis-owned media agency on Monday published its quarterly adspend growth forecast - and pictures a gloomy world scenario, especially with regard to TV and the traditional 30-second advertising spot.

Earlier this year ZO's overview was roses, roses all the way [WAMN: 19-Apr-05], predicting global growth for 2005 at 5.4%. Three months on, the agency has revised this forecast sharply downward to 4.7% - a fall of seven percentage points.

Nor is it more sanguine about prospects for 2006, lowering its earlier worldwide growth prediction from 6.5% to 6.1%.

Yesterday's updated forecast envisages a decline in global spending on TV by $2.3 billion (€1.9bn; £1.31bn) to $148.2bn. The overall negative impact on the TV market is driven almost entirely by the USA and Japan, each expected to reduce its TV spend by around $1bn.

ZO points the finger in both cases at the redeployment of advertising budgets, with Japan in particular seeing migration of TV revenues to the internet. Another factor is the advent of TiVo and other personal video recorders, that enable viewers to skip ads without interrupting their favourite shows.

Still in Cassandra mode, the agency warns that TV, the mainstay of most companies' marketing budgets with a 37% share of the global advertising market, "may now be beginning a long newspaper-like decline".

In the USA, ZO sliced $3.6bn from its traditional media estimates (including TV) and added $1.2bn to its internet forecast, revising the latter upward by 8% to $16.4bn.

Data sourced from; additional content by WARC staff