NEW YORK: Global adspend will rise by more than 5% this year according to GroupM, the media arm of WPP Group, although the company has revised down its projections due to financial instability in many markets.

In its latest biannual "This Year, Next Year" report, GroupM estimated worldwide advertising expenditure will increase by 5.1% in 2012, but this marked a noticeable softening from its previous forecast of a 6.3% expansion.

Translated into dollar terms, this means measured media spend will now reach $506.3bn in 2012, versus the earlier prediction of $522bn. This can be weighed up against the $482bn recorded in 2011 and $459bn in 2010.

Economic uncertainty in the United States and Europe was the largest single factor behind this reappraisal of the situation facing the ad market this year.

More specifically, investment levels in the hard-hit eurozone nations of Ireland, Greece, Italy, Spain and Portugal fell by 6% in 2011 and are expected to drop by an additional 8.8% in 2012.

Furthermore, although GroupM predicted a stabilisation in trading conditions for these nations in 2013, this presupposed an "orderly normalisation” of the eurozone.

Conditions remained more robust in the United States, anticipated to witness a 3.6% expansion in 2012 to $152.5bn, a comparatively modest decline on the prior prediction of 4% growth.

By channel, digital revenues are set to increase by 18% worldwide in 2012, improving on the previous 16% forecast.

The medium will thus accrue a 20% share of expenditure this year, and will flourish again next year, when ad sales figures will leap by 22%.

"Internet advertising is growing in every country," Adam Smith, GroupM's futures director, said. "The continued development of internet advertising, notably video, will now possibly nip at TV's nominal share."

If this is the case, television's 43% market share in 2011 may come to represent a high watermark, although Smith noted "some internet video investment will simply return to different pockets of the same TV vendors."

Print channels, by contrast, should experience an on-going downward trend, with newspapers' share hitting a new low of 17% in 2011, and predicted to contract by an additional 1% on this measure in 2012.

Data sourced from GroupM; additional content by Warc staff