US rebound set to boost global adspend

30 August 2010

LONDON: Global adspend will rise by 3.9% in 2010 and 4.7% in 2011, thanks to a "faster than expected rebound" in the US and continued growth in Asia and Latin America.

Carat, the media network owned by Aegis, has revised its previous estimates of a 2.9% improvement this year and 4% next as a result of "recent trends towards stabilisation."

It predicted the US would follow up a 14.1% drop in 2009 with successive annual increases of 1.1% and 1.7%, measured against forecasts of 0.2% and 1.4% respectively in March.

Digital is set to drive this process, with paid-for search and mobile enjoying a surge in demand.

Sentiment has also hardened in Western Europe, where revenues are pegged to expand by 1.3% in 2010 and 2.7% in 2011.

After a contraction of 12% in 2009, a 3.5% uptick in 2010 and 4.1% lift in 2011 could help restore confidence in the UK.

These totals stand at 2.9% and 2.7% in turn for France, and 1.5% and 2.9% for Italy.

However, the recession may endure another year in Spain and Germany, before the two nations finally return to growth in 2011.

With increases of 11.2% this year and 14% next, Latin America is due to lead the global charge, followed by Asia Pacific on 8.2% and 7.6%, and Central and Eastern Europe on 5% and 10.2%.

More specifically, investment levels in China are likely to expand by 16.8% in 2010 and 15.3% in 2011, building on a 12.4% jump in 2009.

Figures for Brazil come in at 12.7% and 14.4% in the timeframe assessed by Carat, and Russia boasts similarly impressive numbers of 10.8% and 15.3%.

Among the advanced markets, Australia seems well placed as totals rise 7.5% in 2010 and 5.8% in 2011, but conditions appear especially challenging in Japan, off 3.1% in both years.

Looking to media, television ad sales are anticipated to grow by 6% annually, boosted in particular by Latin America, where this medium takes 63% of spending.

Returns for radio advertising are expected to increase by 4.2% in 2010 and 5.7% in 2011, while outdoor witnesses growth of 3.9% and 4.4%.

Turning to print, a 3.2% decline in 2010 and 1.3% slide in 2011 mean newspapers' share will decrease to 18.7% at the close of next year, compared with 21.3% in 2009.

Magazines are set to remain essentially flat in value terms, as their proportion of adspend dwindles to 9.8% in 2011, down by nearly 1%.

In contrast, online revenues should surge by 13.5% this year and 12.3% next year, meaning the web is responsible for 11.3% of budgets by 2011.

"The indications are that global spending this year will rise … which is a further signal of an increasingly optimistic environment," said Jerry Buhlmann, chief executive of Aegis.

"The overall data, however, does compare against weak 2009 figures and is comprised of some significant regional variances."

Data sourced from Carat; additional content by Warc staff