Zenith Bullish Over World Adspend Prospects

24 October 2005

In its latest quarterly report released today (Monday), global media network ZenithOptimedia upped its June forecast for worldwide growth in adspend from 4.7% to 5.2%.

According to the agency, based on buoyant conditions in emerging markets such as China, Brazil, Russia, Saudi Arabia and Indonesia, worldwide advertising expenditure will rise to $406 billion (€339.5bn; £229.5bn) this year. This compares with $386bn in 2004.

In terms of percentage increases, the emergent nations will reflect the most growth, accounting between them for around one third of the global upsurge.

But the USA remains the main driving force for growth, "by virtue of sheer scale rather than inherent dynamism", according to ZO. Stateside spending in the current year is likely to increase by $5.9bn.

On the face of it, ZO's data appears to confound fears within the global ad industry that US policies in Iraq, Afghanistan, Iran and other hotspots will trigger antagonism toward American products and US-style consumerism - not least because two of the largest predicted regions for growth are Muslim: Saudi Arabia and Indonesia.

The fastest-growing region this year is Latin America where spend is forecast to rise 19.3 %, up from 12.9% in 2004. Brazil, in particular, is set to rise by $1.9bn - accounting for around 10% of global growth thanks to a "consumer credit boom".

However, a downbeat note is struck in the agency's prognostication for global TV advertising. Its slice of the worldwide advertising pie is predicted to fall from 37.4% in 2004 to 37.1% this year. Conversely, internet advertising will continue to grab larger market share, up from 3.7% to 4.3%.

The overall global forecast for 2006 and 2007, is continued growth, rising respectively by 6.2% and 6.1%. Assuming, of course, no change in the world political and economic situation.

A somewhat unlikely scenario.

Data sourced from Financial Times Online; additional content by WARC staff