TV to enjoy 2012 effect

22 December 2011

LONDON: The TV ad market will enjoy strong growth next year due to the "quadrennial effect" of events such as the Olympic Games, analysts have claimed.

A report from Digital TV Research, using ratecard data from 55 territories, suggested that global TV adspend will reach $163bn in 2012, an increase of 5.4% from the year before. The firm also predicts a year-on-year increase of 3.5% for 2011.

Simon Murray, author of the report, said: "The advertising industry is boosted [in 2012] by the US Presidential elections, the summer Olympics in London and the Euro soccer championships in Poland and the Ukraine."

The rapid growth is also likely to be maintained over the medium term, with the report predicting that overall spend for the channel will reach $214bn in 2017, up 39% from this year's total.

The Digital TV Research report indicated that the so-called "quadrennial effect" would cancel out headwinds to growth such as volatile economic conditions and the disruptive effects of the digital revolution.

Emerging markets – which have been left relatively unscathed by the downturn, and which tend to rely more on traditional media than mature markets – are likely to provide most of the increase in expenditure.

China was earmarked by Digital TV Research for particularly rapid growth, and is scheduled to overtake Japan as the world's second-largest TV market in 2013.

Nevertheless, economic difficulties are expected to impact on adspend in some mature markets.

Murray added: "Only five countries will reach double-digit growth in 2012 - and five will experience declines. Eurozone uncertainty has clouded investment plans in Europe."

However, this result is an improvement from 2011, during which 12 nations – mostly in eastern Europe – suffered a fall in expenditure.

Over the next five years, the bulk of adspend growth is expected to be provided by free-to-air TV buys. Expenditure on this sector will grow by $40bn over the period to 2017, twice the $20bn extra spent on multichannel TV.

Data sourced from Digital TV Research; additional content by Warc staff