TV adspend to rise

06 June 2011

LONDON: Television advertising spend should record consistent worldwide growth over the coming five years, according to a new forecast.

Insights provider Informa Telecoms & Media estimated expenditure levels will rise by 3.8% in 2011, reaching $149bn.

This follows on from a 10.3% expansion during 2010 and an 8.1% contraction across 2009 as a whole, when the recession exerted a profound impact.

Adam Thomas, Informa's media research manager, suggested the favourable outlook for 2011 was shaped by a variety of trends.

"The fairly conservative increase expected in 2011 is driven by a perception that the global economic recovery is not yet on a solid footing. But this is not the only factor limiting the ad market," he said.

"Audiences are being fragmented by greater programming choice. This has given advertisers greater channel choice and enabled them to negotiate lower rates."

Among the primary contributors boosting income last year was a noticeable hardening in consumer and corporate confidence, especially concerning shoppers and companies from America and Europe.

The FIFA World Cup, held in South Africa, also proved beneficial, and the 2012 London Olympics and US Presidential elections should yield similar boosts next year.

Looking further forward, the 2014 FIFA World Cup and 2016 Olympics, both heading for Brazil, are likely to be key drivers helping television ad sales hit $186.7bn by the latter date.

North America is set to retain its dominant position in revenue terms, contributing 40% of the total, but Latin America is anticipated to witness the most impressive rate of improvement.

Alongside major sporting events, technological developments are encouraging positive shifts, Thomas continued.

"The transition of TV from analogue to digital has enabled TV channels to create a more ad-friendly environment," he said.

"Tried and tested demographic-based TV measurement has become much more sophisticated and there are already forays into new metrics such as engagement and return on investment, which offer the prospect of greater precision and therefore value."

Data sourced from Informa; additional content by Warc staff