LONDON: Agency revenue growth rates will fall in 2012 as an uncertain economic environment dampens confidence, a new report has suggested.

Analysts at Barclays Capital, an investment bank, said that average revenues for the large agency holding groups will rise by 2.9% next year, following growth of 5.6% in 2011.

This could reflect the ongoing volatility in the global economy, with concerns over the eurozone debt crisis and political deadlock in the US high among consumers and companies alike.

But the Barclays Capital report added that ad agencies' revenues would be bolstered over the long term by several factors, including the shift in adspend from traditional media to digital media.

The global reach of the holding groups could also prove beneficial, due to the continued outperformance of emerging economies, the report added.

"We believe that the agencies have become more valuable in an increasingly fragmented and complicated world and that the tailwinds from digital and emerging markets offer structural growth in an environment where cyclical growth may be hard to come by," the Barclays Capital analysts said.

Meanwhile, the International Ad Forecast, which tracks adspend across 12 key global markets, predicts +4.9% all-media growth for 2012, higher than 2011's increase of +3.2%.

Over this period, internet will record year-on-year increases of 15% in 2011 and 12.3% in 2012, while newspapers and magazine expenditure will fall.

Media-wise, Barclays Capital also forecast that the "Wal-Mart effect" – the long-term trend for companies shifting adspend from local TV and print media to their national equivalents in order to drive price efficiencies – would continue into 2012.

Figures cited by the report indicate that 38% of overall adspend in the US, the world's largest advertising market, would go to national media this year.

This is an increase of 13pp from 1980.

Data sourced from Mediapost/Warc; additional content by Warc staff