GLOBAL – SEPTEMBER 2011: ZenithOptimedia has adjusted its global ad expenditure prediction to 4.1% growth in 2011, 0.1% below its April prediction, returning to 2008’s pre-recession level of US$471 billion. The ad market continues to recover from the 2009 recession, but growth has dipped this year in response to economic pressures, natural disaster and political disruption. More robust growth is forecast to resume in 2012 and 2013.
Shifting continents
The media agency network has downgraded forecasts for North America, Western Europe, Central & Eastern Europe and Latin America. North America is expected to grow 2.3% this year and Western Europe, grow 3.3%. Central & Eastern Europe (9.0%) and Latin America (6.7%) are still expected to grow far faster than North America and Western Europe.
On the other hand, Asia Pacific is expected to grow 5.9% this year, up from the 4.6% April forecast. This is partly because the earthquake in Japan has been less disruptive than initially feared. Ad expenditure in Japan is forecasted to decline 2.4% this year, down from 4.1%, counterbalanced by increases driven by upgrades in China (from 11.7% growth to 13.4%) and Malaysia (from 10.0% to 12.3%).
The big change for this forecast is for the Middle East and North Africa, where ZenithOptimedia now forecasts a decline of 12.1% in 2011, down from the previous forecast of 0.1% growth. The political turmoil has spread further, and advertisers have continued to pull campaigns in the three relatively large ad markets that have been engulfed in this turmoil (Bahrain, Egypt and Oman), as well as cutting back their exposure in pan-regional media. The effect of these adjustments at the global level is limited by the fact that the Middle East and North Africa accounts for only 1% of global ad expenditure.
The next two years
2012 will benefit from the ‘quadrennial’ events: the summer Olympics in the UK, the European Football Championship in Poland and Ukraine, the Presidential elections in the US. 5.9% growth in global ad expenditure is predicted for 2012, up from the 5.8%.
There are now two ‘developing’ markets in the world’s top ten ad markets, and there will be three in 2013. China is now the third-largest ad market in the world, and is catching up quickly with second-placed Japan. Brazil, at sixth place, is even closer to the UK: 81% of the size of the UK in 2010 and will be 91% in 2013. Russia, which was in 13th place in 2010, will be in ninth in 2013.
Rise of the internet
The internet continues to grow at the fastest rate of any medium, at an average of 14.2% a year between 2010 and 2013. Display is the fastest-growing segment, growing by 16.4% a year, driven mainly by online video and social media. Streaming video ads are growing extremely quickly, thanks to the emergence of do-it-yourself tools that have allowed local advertisers to enter the market. In most developed markets, social media sites are near the top of the list of most-popular websites, and they are often way ahead of their rivals in time spent by users. Paid search is growing by 14.4% a year, but its growth is being slightly restrained by the shift in search behavior from desktop to mobile devices, where costs are currently lower. Online classified is growing relatively slowly, by 9.1% a year, while employment and property markets remain weak in the biggest countries.
Overall, ZenithOptimedia predicts internet advertising will grow by US$31.3 billion, from US$63.7 to US$95.0 billion between 2010 and 2013, and by 2013 the internet will be the world’s second-largest medium, with an 18.3% share of spend.
TV still growing, print continues decline
Television is the next fastest-growing medium, at 6.2% a year. It is also the largest contributor to global growth, accounting for 49% of new ad dollars between 2010 and 2013. Television’s share of the global ad market has risen steadily over time and shows no sign of reaching a plateau: it attracted 40.1% of spend in 2010, up from 37.3% in 2005. The amount of time viewers spend watching television continues to increase.
Newspapers and magazines have been declining since 2007, with a brief pause for magazines in 2010, when ad expenditure remained essentially static. We expect this decline to continue throughout our forecast period. Magazines are suffering less than newspapers, because the experience of reading a magazine is less easy to replicate online, and because they do not rely so much on the timely delivery of information, where the internet has a big advantage over newspapers.
