• by Julia Dudnik Stern , April 24, 2009

According to the latest figures from ZenithOptimedia, global ad spending will decline by 6.9% in 2009 compared to last year. The largest losses will be in emerging Central and Eastern European markets, which will drop by 13.9%. North America is projected to decline by 8.3%, with the United States losing 8.7% -- more than both regional and global averages. Western Europe's projected ad-spend decline is 6.7%.

Zenith predicts that the ad market will not recover until corporate profits pick up again. North America, including the U.S., will not see ad-spend growth until 2011, when Zenith projects revenues will finally rise by 1%. All other regions -- led by Africa, the Middle East, and Central and Eastern Europe -- will begin to rebound in 2010.

The chief factor causing the decline is the global financial crisis: Consumers are putting off big purchases, shifting consumption from premium to value products and spending more time at home. Zenith adds that 2009 is a comparatively slow year -- with no quadrennial events, such as the Olympics or elections, which make comparisons to 2008 even less favorable.

Latin America and Asia Pacific are the least affected markets, projected to lose only a respective 2% and 3.4% of ad revenue since 2008. Most Latin American markets will continue to grow, except Brazil and Colombia. Ad expenditure will also grow in China, India and Indonesia, counterbalanced by sharp falls in Taiwan, Singapore, South Korea and Japan, which contributes 38% of the region's ad expenditure.

The large drops of ad revenue in Central and Eastern European markets -- including Russia, Turkey and Ukraine -- are one-time corrections by international advertisers that have reassessed the long-term potential of these markets, per Zenith.

Finance, automotive and travel markets have also sharply cut back spending. Some European markets (France, Germany) have seen auto-advertising growth due to government incentives. Savings accounts and certain types of insurance products remain the only financial products with growth potential and some ad dollars.

As businesses cut back expenses, airlines have lost premium traffic. However, leisure travel is still popular -- and so is airline advertising to consumers in markets with exchange rates favorable to consumers spending Euros or dollars.

The Internet is the only medium expected to grow this year. Most of that growth will come from search advertising. Zenith predicts 9% growth of U.S. search advertising, compared to a 1.8% decline in display ads. Online video, rich media and radio are forecast to grow by nearly 30%; however, these represent less than 12% of the total U.S. Internet expenditure.

Offline, television will remain strong. Although ad revenues will fall 5.5%, TV advertising will still gain market share. Advertisers are cutting budgets across the board, but usually cut TV last.