"It's clear that the worldwide economic issues affecting businesses are having an impact on where and how advertisers spend their money," Jerry Buhlmann, CEO of Aegis Media, stated in the report. The where and how, he implied, are both geographic and by media type. Geographically, he said the downgrades have been driven by slower-than-expected growth in the industry's biggest markets, especially the U.S. and the U.K., but also Spain and, surprisingly, China, which just reaped the boon of a Summer Olympics Games. Carat estimated that those four nations would contribute less than 5% of the growth in worldwide ad spending this year, and that the main drivers would be emerging markets in Central and Eastern Europe, Central Asia and Latin America.

By medium, Carat reduced the outlook for every major medium with the exception of the Internet, which it now predicts will rise by 23.7% in 2008 vs. its early projection of 23.3%. For 2009, Carat now predicts online ad spending will expand 18.6%, vs. its earlier forecast of 17.8%.

As a result, Carat predicts the Internet will expand its share of global advertising budgets relative to many traditional media.

"Whilst TV''s share of spend has stabilized, Internet advertising is continuing to drive spending ahead of other sectors in nearly every region," Buhlmann noted. " Internet is set to overtake radio this year to become the world's third most popular medium, behind TV and print."

Buhlmann said the growth in online's ad spending share has less to do with the growth of consumer use of online media, and more to do with a secular shift within the advertising industry that is driving marketers and agencies toward media that deliver measurable returns on advertising investments.

"With search now central to the planning and execution of any campaign, online media brings a greater level of accountability not just to itself but to TV, print and other forms of advertising," he said. "This is why we are predicting further strong growth for internet, even when advertisers are cautious in many of the other sectors."

 Source: Carat.